Will U.S. LNG Have an Edge in the Indo-Pacific?
This essay explores the current and potential competitiveness of U.S. liquefied natural gas (LNG) in Asia, including the tools, statecraft, financial resources, and other measures that the Trump administration and U.S. Congress might consider to further boost the fuel’s competitiveness.
There is no guarantee that Asia’s most promising LNG consumers will be able to absorb U.S. LNG exports because several factors undermine U.S. LNG’s economic advantage in Asia, including intense competition with rival suppliers that are closer to Asia geographically. But it would be too narrow to assess U.S. competitiveness solely on economic grounds. Politics and trade diplomacy also inform trade flow dynamics, and the importance of both factors will be further underscored in the execution of the Asia Enhancing Development and Growth through Energy (EDGE) initiative—the energy security component of the Indo-Pacific strategy.
- The Trump administration will continue to use LNG as leverage in its efforts to reduce trade imbalances and strengthen bilateral energy relations, including in trade negotiations with China, Japan, and India, to name just a few countries. This strategy will both help and hurt the prospects for U.S. LNG.
- Under the umbrella of Asia EDGE, the U.S. and its partners will play a greater role in energy infrastructure financing in South and Southeast Asia, both as a commercial tool (e.g., to create demand by helping with financing and establishing market rules) and as a soft diplomacy tool (e.g., to counterbalance China’s Belt and Road Initiative and Russia’s use of state coffers to advance geopolitical energy projects).
- As Asia EDGE gains traction, the U.S. government will have the opportunity to morph the various strategic energy partnerships, including with Japan and Australia, into a multilateral initiative with like-minded partners—though probably under a different administration.
Leslie Palti-Guzman is the President of GasVista.