US LNG revival expected following Trump’s return to office

As US president-elect Donald Trump prepares to return to office, the country’s LNG industry is expected to undergo a new wave of expansion

What: The US LNG industry is expected to expand following Donald Trump’s return to office.

Why: Trump has voiced plans to swiftly overturn the Biden administration’s pause on new LNG export permits and pursue development of new projects.

What next: Trump’s advisers are reportedly cautioning against restarting the issuing of new LNG permits too quickly.

The US LNG industry – and therefore the country’s natural gas industry more broadly – is expected to see a new wave of expansion following president-elect Donald Trump’s return to office later this month. One early high-profile move by the incoming Trump administration could be to lift the freeze imposed by the administration of US President Joe Biden on the issuing of new LNG export approvals to countries with which the US does not have a free-trade agreement (FTA).

The pause was introduced in early 2024 to give the Biden administration time to conduct a study into the environmental and economic impacts of authorising more US LNG exports. The US Department of Energy (DoE) completed the study in December. The study’s findings indicated that approval of additional LNG export projects was not in the public’s best interests.

For example, the study found that approving additional export projects would add 1.5 gigatonnes of greenhouse gases (GHGs) to the atmosphere by 2050. It also found that exporting additional gas could result in wholesale domestic natural gas prices rising by over 30%, with less gas available to domestic consumers.

The study’s findings are considered unlikely to deter Trump from pushing ahead with his plans to lift restrictions on authorising further exports of US LNG to non-FTA countries. Nonetheless, Reuters reported last week, citing sources familiar with the matter, that Trump was being cautioned by his advisers against restarting LNG permitting too quickly.

Urging caution
The advisers are reportedly urging patience in having the LNG export approval pause lifted. They have been said to be fearful that attempting to lift the pause too fast could lead to quickly approved export licences being thrown out in court.
Trump has vowed to use whatever means necessary to lift the LNG permit approvals freeze, including via an executive order, which could mandate the DoE to authorise pending export permits. He has also previously suggested that he could declare a national emergency for US energy, allowing him to fast-track permits for new energy projects.

The reported warnings from Trump’s advisers highlight how challenging lifting the freeze immediately could be. The Biden administration has also been taking various actions in its final months that could insulate the pause from being cancelled abruptly.

For example, the DoE study on the implications of increasing LNG exports is expected to provide a legal basis for challenging an immediate lifting of the pause on new project approvals.

Initially, it was thought that Trump may find a workaround by launching a study of his own that would have industry-friendly findings. However, it is now thought that Trump’s advisers are encouraging the president-elect to tackle the study head-on and use the required public comment period to question some of its key findings. This could pave the way for the report to be thrown out and be used to make the case that prior studies should take precedence.

What next?
The public comment period runs until February 18. However, in a move that may surprise some, it is thought that Trump’s advisers may encourage the comment period to be extended to allow more time to undermine the study’s merits. This could also strengthen the case against potential lawsuits seeking to overturn new approvals of export licences further down the line. And indeed, environmental groups have already said they would challenge the incoming Trump administration in court if it does not incorporate the DoE study’s findings into its decision-making on approving new LNG export projects.

Currently, there are 12 LNG projects that remain in limbo as they await non-FTA export licences from the DoE. The stalled projects affected by the pause include Venture Global’s 20mn tonne per year Plaquemines LNG facility and Energy Transfer’s 16.45mn tpy Lake Charles LNG plant.

Despite pushback from environmental groups, S&P Global has forecast that US LNG export capacity will double over the next five years. And Trump’s pick for US Secretary of Energy, Chris Wright, is also keen to prioritise the expansion of LNG export capacity. 

Wright is an industry insider who serves as CEO of oilfield services company Liberty Energy but is planning to step down from this role once confirmed as Secretary of Energy. In his confirmation hearing on January 15, he told US Senators that his first priority would be the expansion of domestic energy production, including LNG and nuclear power. Wright has echoed Trump in calling for the removal of barriers to progress on energy expansion.

Industry expectations
Trump’s moves upon taking office will be closely watched and the lifting of the pause on US LNG export approvals is thought to be among the gas industry’s highest priorities. According to the American Exploration and Production Council (AXPC), an industry group, other industry priorities include eliminating methane waste fees for oil and gas operators and associated rules for curbing methane emissions on public land, rolling back new methane reporting requirements and undoing Securities and Exchange Commission (SEC) climate disclosure regulations.

It will not be surprising if the Trump administration is quick to pursue such policies, including via executive orders. The most likely scenario during the Trump administration’s first 100 days, Energy Intelligence has suggested, is that implementation and enforcement of rules issued under the Biden administration could be halted or frozen while agencies work to overhaul the regulations. Meanwhile, the Wall Street Journal reported this week that the Trump administration was preparing a series of executive orders aimed at boosting US fossil fuels while undoing Biden-era moves including a push for the US to adopt electric vehicles (EVs) and restrictions on drilling on federal land.

While plans remain fluid, the resumption of LNG export approvals is expected to be an early priority. However, equally expected is quick pushback from environmental groups opposing further LNG expansion.