The former president’s power politics could increase sales of liquefied vegetable fuel to a country he criticized during his election campaign.
A. P. , Getty
Former President Donald Trump is expanding exports of herbal fuels if elected this fall, and a surge in shipments may mean more business with one of United States’ biggest foes: China.
That would put the Trump administration in an awkward position for a moment, as much of the timing of its crusade is focused on fighting the Asian economic giant and enforcing meaningful price lists for the giant’s imported goods.
Trump proposes eliminating key regulations for the LNG sector and would most likely push for questionable allocations, such as the allocation of the terminal in Louisiana known as CP2. If he is elected, the Republican leader is also expected to aim for the simplest possible completion for the sector, such as a DOE requirement that companies export LNG within seven years of passing the assignment.
Analysts say the November election could directly determine how much U. S. LNG is sold globally and to whom. Significant volumes of U. S. LNG exports will almost certainly end up in China, the biggest potential new market for U. S. gas, even as industrial protections against that country are in vogue in the United States.
Many Republicans see a possibility of imposing Chinese concessions on LNG.
“If you could supply your wonderful economic enemy with a source of power for which he would pay cash. . . If you could make him addicted to it, which would blank his surroundings, wouldn’t that give you more weight in the end? , Rep. Frank Lucas (R-Okla), chairman of the Committee on Science, Space and Technology, said at a hearing in June.
Lucas said LNG export restrictions “limit their ability to create leverage with one of their biggest adversaries. “
China is reluctant to sign new long-term contracts with the United States, other suppliers say, experts say. Last year, China Petroleum
The U. S. Energy Information Administration (ERA)The U. S. says Chinese fuel will increase by 7% in 2023 compared to 2022, while the country’s LNG imports will increase by 13% in that period.
The Biden administration has complexed many fuel export projects, but the Energy Department suspended approval of new projects in January to evaluate the economic and climate effects of LNG, a fossil fuel that emits greenhouse-resistant methane, when burned or leaked. Environmental outfits like the Sierra Club, Greenpeace and Evergreen Action strongly oppose LNG.
The management also warns that U. S. fuel will give life to the world’s second-largest economy.
“China is the largest potential source of our LNG,” Deputy Secretary of Energy David Turk said at this June hearing before the House Committee on Science, Space and Technology. House of Representatives. ” It is possible that they will increase their LNG consumption by up to 65% [until] 2030. “
Some Democratic senators and Sen. Angus King (I-Maine) passed a bill in February banning sales of U. S. LNG to China.
Beyond economic tensions, the pressure to get more LNG to China comes at a delicate time in bilateral relations. The Chinese government recently suspended arms and nuclear nonproliferation negotiations with the United States amid rising tensions over Taiwan. The Federal Bureau of Investigation warns of Chinese espionage.
At a wide-ranging news conference rife with private attacks on Democratic White House candidate and current Vice President Kamala Harris this month, Trump said he and Chinese President Xi Jinping “have a very good relationship until Covid,” in reference to coronavirus. pandemic whose origins go back a long time. in Wuhan, China, in 2019.
“We can’t allow China to take advantage of the United States,” Trump said, adding that he hoped to “get along very well with China” if he won in November.
Karoline Leavitt, press secretary for the Trump campaign, did not comment on a de E
Last year, congressional Republicans tried to force the Biden administration to suspend crude oil shipments to China from an emergency federal reserve. Now, some Republicans are calling for restrictions on other exports to China, such as microchips, arguing that American chips may also allow the country to take the lead in the race for synthetic intelligence. House Republicans are likely to approve several China-related spending next month, according to POLITICO.
Experts believe tensions with China are likely to persist for years.
“Whoever wins the White House and/or Congress, the pressure on China will increase,” said Christopher Goncalves, managing director and chair of the energy and climate department at Berkeley Research Group.
Biden’s leadership says Chinese production endangers American companies. Jay Shambaugh, deputy secretary of foreign affairs at the Treasury Department, recently said that China is contemplating “further boosting manufacturing as an engine of Chinese growth, which means taking on a giant percentage of global production. ” “and added that “China’s trade subsidies are much larger than those granted to industry. “
Tariffs on steel, electric cars and other Chinese goods have risen over the past four years, following a tariff war between the United States and China during the Trump administration. Biden’s team is touting the tax breaks and blank energy subsidies of the 2022 Inflation Reduction Act and the bipartisan Infrastructure Law of 2021 to counter the direction of China’s productive sector.
Dan Byers, vice president of policy at the United States Chamber of Commerce’s Global Energy Institute, said China’s dependence on the United States for energy is “generally one thing. “
China was the sixth-largest destination for U. S. LNG exports in May, according to a recent DOE report. Just over a portion of the country’s LNG shipments went to Asia that month, followed by 38% to Europe.
China relies on locally produced coal and natural energy, LNG and Russian fuel to fuel its economic expansion and military might. The assignment of a Russian pipeline (still under negotiation) to northeast China, called Siberian Power 2, could bring in $50 billion. cubic meters of fuel consistent with the year to the Chinese economy, more than double what will be transported between the two countries in 2023.
Under the Trump administration, China imposed price lists on U. S. LNG. The country and its leaders have a specific energy strategy, observers say.
“They may have easily capitalized on our years of cheap, reliable LNG and dependence on us. But they didn’t,” said Courtney Manning, a research scientist at the American Security Project. “Beijing knows that if it begins to increase or sign contracts for periods of 16, 20 or 24 years, as it does with other countries whose relations are more normalized, the United States can take advantage of it. »
In a Columbia University podcast published last month, Erica Downs, a senior fellow at the school’s Center for Global Energy Policy, also rejected the argument that U. S. LNG can seriously influence Chinese policy, saying China has a “long-standing technique for power supply. ” “Security, that is, avoiding dependence on a single supplier.
Some observers say LNG serves as a bridge between the world’s two dominant economies.
“These economies are so intertwined that it makes more sense to have reliable trade,” Nick Loris, vice president of public policy at the conservative Coalition for Climate Solutions, said in an interview. “There are many obvious reasons why policymakers are concerned about the Chinese government, and those reasons are legitimate. But I think there are also many reasons why we disassociated ourselves from China. This requires a balancing act.
To bring U. S. LNG exports to life, the former president will first have to win the election. He will then face serious and demanding situations facing the industry, in addition to festivals in the foreign market, Biden management regulations and environmental lawsuits.
Trump’s allies in the fossil fuel sector are committed to overcoming those obstacles.
“For the environment, the case is clear: We want more American fossil fuel and more capacity to deliver LNG to allies,” Mike Sommers, president of the fossil fuel lobbying organization American Petroleum Institute, recently told X.
Project 2025, a blueprint for the current Trump administration, written in part by his former appointees and led by the conservative Heritage Foundation, calls for automatic shipments of LNG to “all of our allies” and urges the elimination of “political and climate interference” . “within the DOE. Approvals.
Trump has recently distanced himself from the 2025 project as complaints from Democrats about the initiative have increased. The director of Project 2025, Paul Dans, resigned at the end of July.
Trump allies say deregulation would boost exports, create thousands of domestic jobs and reduce carbon dioxide emissions. This technique has the support of many Republicans and some Democrats in Congress.
An industry-backed report released in April found that U. S. LNG emits fewer greenhouse gases than coal in many global markets.
More than 50 House members, plus several Democrats, suggested the DOE in a letter last month “rapidly review and approve” new LNG projects in the United States, which they called “a boon to the United States and the global economy. ” . A new licensing bill gaining ground in the Senate would speed up LNG approvals.
But the November election comes at a time when policymakers and the American public are debating the price of methane-emitting fuel in a world increasingly devastated by climate change. Many experts say the optimistic picture of LNG painted by Trump’s allies is much more complicated.
Climate activists warn that the global expansion of LNG will override greenhouse fuel emissions relief targets and pollute communities at U. S. production sites. Some national security experts say LNG exports threaten the national energy reliability and national security goals of the United States.
Sierra Club and Greenpeace released a report last week that found air pollutants from LNG export terminals are causing many premature deaths in the United States and billions of dollars in fitness costs, as well as climate damage.
Other analysts have said that exporting U. S. LNG to China could simply reduce that country’s coal consumption.
Global demand for LNG is increasing, even as many countries use more renewables and coal to meet electricity demand.
The International Energy Agency, a Paris-based organization designed to strengthen global energy cooperation, said in a recent report that the LNG industry this year “has grown at a rate well above its old average,” noting that “China and India have begun to double again. ” 10-digit expansion rate in the first part of 2024. “Shell, a major oil and fuels company, forecasts a 50% expansion through 2040.
But Chinese demand for LNG from Gonçalves is expected to moderate.
“It turns out that the customers for a physically powerful expansion in China that we have seen over the last decade have disappeared, and a much slower expansion in China is now expected over the next five to ten years,” he said.
Biden’s leadership announced a pause in January on the approval of programs to export LNG to countries that have a flexible industrial agreement with the United States, a move welcomed by environmental teams and criticized by the oil and fuel industry.
In July, a federal ruling in Louisiana overturned the freeze, saying the DOE’s ruling seemed “completely devoid of explanation or logic and possibly would have been the epiphany of ideocracy. “
This month, Biden’s leadership appealed the judge’s ruling to the U. S. Court of Appeals.
But U. S. LNG exports are expected to grow more than 16% between 2024 and 2025, according to the Department of Energy research agency.
Fauzeya Rahman, an LNG market specialist at ICIS Commodities Research Group, said at least five projects were awaiting DOE approval after getting approval from the federal agency, the Federal Energy Regulatory Commission.
Increasing American exports is one of the keys to the Republican “drill, baby, drill” campaign.
“I will approve export terminals on my first day back,” Trump said at a rally in Las Vegas earlier this year. “It’s smart for the environment, bad and smart for our country. “
The Trump campaign’s Leavitt said Biden’s leadership caved in to “the radical demands of environmental extremists. “
“The decision to block approval of new United States natural fuel export facilities is still a disastrous self-inflicted wound that will further undermine the United States’ economic and national security,” he said in a statement. “From day one, President Trump will release American Energy. »
American manufacturers strongly support Trump. Along with broad deregulation at the federal level, LNG is also a very sensible precedent for American shale manufacturers who have vast untapped fuel reserves and see their biggest opportunities for expansion and profits abroad.
Ellen Wald, an energy representative and member of the Atlantic Council, predicted that at some point the Trump administration would push for approval of new LNG facilities to meet demand around the world, in Europe, where many analysts anticipate a decline in gas.
“WE. LNG is the fastest developing LNG,” he said in an interview. “The concept of ‘Oh, I guess so many things have already been approved that we don’t want to approve anymore,’ I think is very, very short-sighted. “
“Your allies may use more and you don’t know what’s going to happen in 10 years,” he said.
Goncalves said Trump will most likely help LNG exports to China, though the scenario is less transparent for a potential Harris administration.
But Paul Bledsoe, a senior fellow at American University’s Center for Environmental Policy, said Harris will most likely continue Biden’s policies on LNG exports, adding that she will support giant exports to Europe.
“I expect that U. S. herbal fuel will continue to play a primary role in replacing Russian fuel under Harris,” said Bledsoe, a former Clinton administration official.
Bledsoe, who said he expects new authorization criteria for LNG exports to emerge from the DOE review, said he hopes Harris will address rising methane emissions from the U. S. oil and fuels industry.
Harris’s crusade responded to a request for comment.
Harris’ focus on fighting inflation makes it clear that she will continue to make production cheaper, Bledsoe said.
Bledsoe said he doubted Trump could do much to boost U. S. LNG exports above the existing record levels seen during the Biden administration.
“I don’t think Trump’s policies have any influence on United States oil and fuel production,” Bledsoe said. “Our oil and fuel production is based on market situations rather than government situations,” he said.
“WE exports will continue to grow, at a slower pace than the past four years,” Bledsoe said.
Steven Miles, a herbal fuels researcher at Rice University’s Baker Institute, said the Trump administration would eventually face a wave of government projects, domestic and foreign, aimed at reducing the fuel’s emissions footprint. herbal.
The “methane tax,” a U. S. program created under the Inflation Reduction Act, requires oil and fuel companies to pay if methane leaks exceed certain levels. Excess methane produced in 2024 would result in tariffs of $900 per metric ton, and those tariffs would expand to $1,500 per metric ton through 2026.
Miles, who said the methane tax is an example of a “headline tax” on U. S. LNG, noted that Qatar, one of the world’s most sensible LNG exporters, has to pay a methane tax.
“Every time we raise prices for us and for them, we’re faced with an economic problem,” Miles said in an interview.
Tyson Slocum, director of the energy program at the consumer advocacy organization Public Citizen, said that even if Trump could simply order his DOE to factor export authorizations immediately, they would be temporarily challenged in court.
“Trump can do whatever he needs to do from day one and pretend that he will pass without delay all those pending and stalled projects, but that will not allow that to happen,” Slocum said. “We will work on our rights as legal stakeholders and take this factor to court. “