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Donald Trump’s plan to ramp up liquefied natural gas exports could provide a $1.3tn boost to the US economy, with the oil and gas industry poised to get the green light to build new export facilities and pipelines on the Gulf of Mexico.
The forecast from S&P Global is based on expectations the industry will double LNG export capacity over the next five years, as the president-elect follows through with a pledge to lift a pause on approvals, expedite new export terminals and turbocharge the industry.
“We already have large contracts in place with major LNG suppliers and we certainly expect to get more of that,” said Alan Armstrong, chief executive of Williams, one of the largest gas pipeline companies in the US.
Still, regulatory hurdles and litigation by green campaigners could slow the LNG expansion, according to analysts.
The US already boasts the world’s biggest LNG sector and the industry is set to be among the biggest beneficiaries of the change in administration. Trump has vowed to roll back regulations and has appointed former North Dakota governor Doug Burgum as secretary of the interior, tasked with slashing red tape.
Venture Global, one of the biggest US LNG developers, is planning to raise $2.3bn in an IPO this month, which would value the company at up to
$110bn as it aims to take advantage of investor enthusiasm over a potential boom in energy exports under Trump.
The first of a new wave of US LNG supply hit the market last month when Venture Global shipped a maiden cargo from its new Plaquemines facility in Louisiana to Germany. A few days later Cheniere Energy announced it had produced its first LNG from a new facility in Texas.
Anatol Feygin, Cheniere’s chief commercial officer, told the Financial Times the US would remain the world’s biggest LNG exporter for decades to come.
Despite record exports of 11.9bn cubic feet a day in 2023, the industry has had a fractious relationship with President Joe Biden’s administration, which paused new licenses for export terminals in January to carry out an analysis of the costs and benefits of continued expansion. Trump has vowed to lift the pause on the first day of his administration — but there could be hurdles.
“Even though President Trump said on the first day he’ll lift the pause . . . you have regulatory risk and litigation risk, so it’s not clear sailing,” said Mark Bononi, an analyst at Wood Mackenzie.
The Department of Energy analysis released in December found the continued rapid growth of the US LNG industry risked driving up domestic fuel prices and imperilling climate targets. While Trump is expected to throw out the report, it could provide legal grounds for green campaigners to target new projects.
“If the Trump administration disregards these facts . . . that’s something we can challenge in court,” said Nathan Matthews, a senior attorney for the Sierra Club.
Gillian Giannetti, a senior attorney for the Natural Resources Defense Council, said the DOE must incorporate and use the findings in the studies because they were in the official record, or else give a reasoned, logical and non-arbitrary reason for why they were not applying them.
“If they do not do that then they would be expressly violating American law,” Giannetti said.
S&P expects LNG export capacity to double over the next five years and that future export activity is anticipated to generate more than $2.5tn in total revenues for US business and $166bn in federal and state tax revenue.
S&P Global has warned that if new or currently halted LNG capacity does not come online, 100,000 jobs will be at risk and $250bn of contributions to GDP will go unrealised as rivals Qatar, Canada and Mozambique accelerate their own projects.
