U.S. LNG industry prepares to expand as Donald Trump vows to lift restrictions

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Donald Trump's plan to increase liquefied natural gas exports could provide a $1.3 trillion boost to the U.S. economy, with the oil and gas industry expected to win permits to build new export facilities and pipelines in the Gulf of Mexico.

S&P Global's forecast is based on expectations that the industry's LNG export capacity will double over the next five years, as the president-elect pledges to lift approval pauses, speed up construction of new export terminals and boost the industry.

“We already have large contracts with major LNG suppliers and we certainly hope to secure more,” said Alan Armstrong, chief executive of Williams Corp., one of the largest U.S. natural gas pipeline companies.

Still, analysts say regulatory hurdles and lawsuits from environmentalists could slow LNG expansion.

The United States already has the world's largest liquefied natural gas industry, which would be one of the biggest beneficiaries of a change in government. Trump has vowed to roll back regulations and appointed former North Dakota Gov. Doug Burgum as Interior secretary, tasked with cutting red tape.

Venture Global, one of the largest U.S. liquefied natural gas developers, plans to raise $2.3 billion in an IPO this month that would value the company as much as
$110 billion to capitalize on investor enthusiasm for a potential boom in energy exports under Trump.

A new wave of U.S. LNG supplies entered the market last month, when Venture Global shipped the first cargo to Germany from its new Plaquemines plant in Louisiana. Days later, Cheniere Energy announced it had produced its first batch of LNG at a new plant in Texas.

Anatol Feygin, Cheniere's chief commercial officer, told the Financial Times that the United States will remain the world's largest exporter of LNG for decades to come.

While exports are set to hit a record 11.9 billion cubic feet per day in 2023, the industry has had a strained relationship with President Joe Biden's administration, which in January suspended new licenses for export terminals in response to continued expansion Analyze the costs and benefits. Trump has vowed to lift the pause on his first day in office, but there may be obstacles.

“Even though President Trump said on day one that he would lift the moratorium… you have regulatory risk and litigation risk, so it's not going well,” said Wood Mackenzie analyst Mark Bononi. ”

An analysis released by the U.S. Department of Energy in December found that continued rapid growth in the U.S. LNG industry could drive up domestic fuel prices and jeopardize climate goals. While Trump is expected to dismiss the report, it could provide a legal basis for green activists to target new projects.

“If the Trump administration ignores these facts . . . this is something we can challenge in court,” said Nathan Matthews, senior attorney for the Sierra Club.

Gillian Giannetti, a senior staff attorney at the Natural Resources Defense Council, said the Department of Energy must incorporate and use the study results because they are documented in official records or otherwise give reasonable, logical and non-arbitrary reasons for why they were not documented in the official record. case. Apply them.

“If they don't do that, then they would be in clear violation of U.S. law,” Gianetti said.

Standard & Poor's expects LNG export capacity to double over the next five years, with future export activity expected to generate more than $2.5 trillion in total revenue for U.S. companies and $166 billion in federal and state tax revenue.

S&P Global warned that if new or currently discontinued LNG capacity does not come online, 100,000 jobs and a $250 billion contribution to GDP will be at risk as rivals Qatar, Canada and Mozambique accelerate their respective projects will not be possible.