Big changes are on the horizon for America’s energy scene. President-elect Donald Trump is gearing up to lift restrictions on exporting liquefied natural gas (LNG), giving US energy producers a big boost. But while this move might excite the energy industry, it’s raising eyebrows among climate advocates, who worry it could make the planet’s problems even worse.
For Europe, America’s biggest LNG customer, the benefits of this shift might not kick in until later in the decade. Right now, Europe is still navigating its own energy crisis, with Russian gas supplies dwindling. A helping hand from the US would certainly be welcome—just not immediately.
A Global Energy Balancing Act
Europe’s energy landscape has been through the wringer. Before Russia invaded Ukraine in 2022, nearly half of Europe’s natural gas came from Russian pipelines. But since then, Europe has drastically cut those imports, turning to other sources like US LNG and gas from Norway to keep the lights on and homes warm.
Today, two-thirds of US LNG exports head straight to Europe. But challenges persist. With a self-imposed deadline of 2027 to cut all fossil fuel imports from Russia, Europe still has work to do to secure its energy independence.
Why Timing Matters
Europe’s immediate future in the gas market is uncertain. A key contract for Russian gas transit through Ukraine expires at the start of 2025. While the loss of these supplies is unlikely to trigger an energy shortage, filling that gap won’t be easy. Analysts warn that Europe might struggle to stockpile enough gas for the following winter, keeping energy prices stubbornly high.
The good news? Relief could come in the latter half of the decade. By then, a flood of new LNG from the US, Qatar, and others is expected to hit the global market. Prices in Europe might finally start to ease—but probably not back to pre-crisis levels.
A Booming US Industry
LNG exports from the US are skyrocketing. In just a few years, America has gone from a minor player to the world’s top supplier, outpacing Australia and Qatar. But this rapid growth hasn’t come without consequences.
Environmental concerns are front and center. Producing and transporting LNG can leak methane—a gas much more potent than carbon dioxide in causing global warming. And the Biden administration paused approvals for new LNG projects earlier this year to study the environmental toll. The results? More exports could mean as much as 1.5 gigatons of extra pollution annually by 2050, about a quarter of what the US emits today.
The European Energy Crunch
Back in Europe, natural gas prices remain high—over double their historical levels, despite cooling from last year’s record highs. For energy-hungry businesses, this is a tough pill to swallow.
Some companies are making drastic decisions, moving operations to places like the US Gulf Coast, where energy is cheaper. It’s a stark reminder of Europe’s uphill battle to stay competitive in a world where energy prices vary so widely.
The Road Ahead
So, what does the future hold? If Trump follows through on lifting the LNG export ban, the extra supply won’t hit the market until after 2030. But when it does, it could ease global gas prices and offer Europe some relief.
For now, Europe is bracing for another tricky winter, navigating high costs and uncertain supplies. In the meantime, the US energy sector is poised to grow even bigger, but the environmental price tag might be one we can’t ignore.
It’s a complicated puzzle, and as always, the pieces take time to fall into place.
