With President Donald Trump’s victory in November, Texas LNG companies were celebratory, ready for a promised end to a federal pause in permitting that threatened their future.
But even as the Trump administration makes moves to expand U.S. exports of oil and natural gas, Trump’s hard-nosed trade tactics are ratcheting up uncertainty within some of the largest foreign markets for U.S. liquefied natural gas.
China, the world’s largest importer of liquefied natural gas, announced Tuesday it was placing a 15% tariff on U.S. LNG, in response to Trump’s decision to impose an additional 10% tariff on Chinese goods. And Trump is weighing tariffs on the European Union, setting up the possibility of a trade war with what is currently the largest market for American LNG.
That has left developers wondering about future demand for their product abroad, even as Trump moves to resume federal permitting for LNG projects. Production of LNG is centered along the Texas and Louisiana Gulf coasts, and developers are considering investing tens of billions of dollars to develop new terminals.
“I wouldn’t feel confident on making predictions,” said Charlie Riedl, executive director for the Center for Liquefied Natural Gas. “We’re in the early days in all of this. It feels fluid, like we’re still an opening salvo of the trade discussions.”
Beside the “energy dominance” narrative the party has been pushing, since, at least, last summer, there is that long rumored $1B “donation”, for working to increase sales for the US oil and gas industry. As posted elsewhere, I see the first concrete evidence of that policy in using tariff threats to push Japan to shift to the US for oil and gas supplies.
Japan imports about 2.7Mpbd of crude. From what I am seeing on line, US oil producers could completely fill Japan’s needs, from current excess production capacity, with excess capacity still remaining.
Doing the same sort of “arty” deal with South Korea may take longer, as South Korea has been having a raging political crisis, so may not be really sure who to send to negotiate.
By the way, is “LOOP” still a thing? The pump seal company I worked for, was involved in that project, some 45 years ago. If the facilities are still there, they may be put into reverse, to convert the crude import facility into an export facility.