LNG as Foreign Policy

The US went from importing LNG in 2015 to becoming the world's largest LNG exporter in 2023. This happened not because of a government export strategy but because private companies built liquefaction terminals to arbitrage the price gap between cheap US gas ($2-3/MMBtu) and expensive Asian/European gas ($10-15/MMBtu). But once the infrastructure existed, the government discovered it had a powerful foreign policy tool.

The policy lever. US LNG exports require Department of Energy authorization. The government can approve or delay new export terminals, effectively controlling how much additional US gas reaches global markets. In 2024, the Biden administration paused new LNG export approvals, citing climate concerns. European allies, who had just signed 20-year contracts with US exporters to replace Russian gas, responded with alarm.

The strategic value. US LNG gives allied countries an alternative to Russian (and increasingly Qatari) gas. Japan, South Korea, and European NATO allies all view US LNG supply as a security relationship, not just a commercial one. US LNG contracts without destination clauses allow these allies to resell cargoes in a crisis, providing flexibility that pipeline gas from authoritarian suppliers never offered.

Does LNG export policy serve energy, climate, or foreign policy goals?

All three, and they conflict. Exporting more LNG strengthens alliances and displaces coal in importing countries (climate benefit). But it raises domestic gas prices and extends global fossil fuel infrastructure (climate cost). The 2024 export pause exposed the tension: foreign policy officials wanted more exports for allied security; climate officials wanted fewer for emissions reduction. No framework resolves this tradeoff cleanly.

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