Indian Council of World Affairs

Introduction 

Energy resources have long served as instruments of geopolitical power, shaping alliances and influencing global economic stability. In recent years, the US went through a transformative shift, becoming the world’s largest exporter of Liquified Natural Gas (LNG) in 2023 and is expected to double its export capacity by 2030, maintaining a dominant position in the market for the near future. 

For the US, LNG exports serve four key foreign policy objectives. First, it helps support its allies in Europe and Asia by reducing their dependence on adversarial suppliers. Second, the US is using energy diplomacy to cultivate new partnerships and deepen it’s influence in the Global South. Third, its growing energy dominance is helping its policy of containing energy rich adversaries like Iran and Russia and lastly, it can use energy resources as a leverage in negotiations for better trade deals or to incentivise compliance with US sanctions. 

This can be observed in the US-Europe energy relations. US LNG exports to Europe, have played a critical role in countering Russian energy dominance, ensuring NATO unity, and reinforcing security and economic ties. This paper examines how US LNG has reshaped Europe’s energy security landscape and reduced Russian dependence. It further argues that President Trump’s “Energy Dominance” agenda, rooted in deregulation and aggressive export promotion will further cement LNG as an important pillar of US foreign policy for the near future. 

The US and Energy Exports 

The Shale Revolution is a significant advancement in hydrocarbon extraction, which has propelled the US as a global energy powerhouse, surpassing Russia in 2011 to become the largest producer of natural gas. This shift has enabled U.S energy exports to become a key tool in diplomacy and foreign policy. 

For many years, shale gas extraction was considered economically unviable due to the challenges associated with accessing and releasing the gas from dense formations. However, with the development of three key technologies: horizontal drilling, hydraulic fracturing (commonly known as fracking), and 3-D seismic imaging, coupled with investments from private sector and substantial government support has helped the US increase production. 

Between 2005 and 2024, US natural gas production more than doubled, increasing from 509 billion cubic meters (bcm) to 1,067 bcm an increase of 108%[i]. A report by S&P Global Commodity Insights, a leading Energy consultancy firm in the US predicts that US LNG industry has already contributed close to $400 billion in the economy since 2016 and growing LNG exports could support nearly half a million jobs annually and contribute $1.3 trillion to GDP through 2040[ii].

Internationally, this remarkable growth in production has significantly boosted LNG exports and helped the US to emerge as a major player in the energy market. In 2024 the LNG exports rose to 122 bcm[iii], the highest ever. The growth in US-Europe LNG trade can be attributed to certain advantages it enjoys over gas pipelines like mobility, less susceptibility to political turbulence and geopolitical uncertainties for Europe. The transatlantic journey avoids 3 vulnerable chokepoints, the Persian Gulf, the Suez Canal and the Straits of Bab-el-Mandeb near Yemen, making it more stable and secure source of energy. By exporting LNG to allies and partners, the US has reduced trade deficits and enhanced energy security for allies, as evident by the inflow of US LNG into European markets since the beginning of the conflict in Ukraine in 2022.

Therefore, these conditions make LNG exports very lucrative, garnering a bipartisan support[iv]. The Senate committee on Energy and Natural resources[v] and the Congressional Energy Export Caucus have consistently shown support for continuing the LNG exports[vi].

European Energy Security and US LNG

For decades, European industries and power generation relied on Russian gas. Till 2021, Russia accounted for roughly 40% of total gas imports to Europe, which is about 155 bcm. By 2023, this figure plummeted to 23 bcm, marking an 83% decline[vii]. Although the relationship was seen as one of mutual benefit, the Ukrainian gas crises of 2006 and 2009, indicated Russia's intention to wield gas for political and security concessions. Following the onset of the conflict in 2022, Russia cut supplies to Europe, creating a “shock” that threatened the collapse of European industries and economy. This move was directed to cause divisions among the EU members in their support to Ukraine by pushing certain members to choose between broader security objectives and national economic stability.

While industrial production faced decline and electricity prices surged temporarily, the alliance unity has remained intact. A combination of strategies including reducing consumption, faster transition to renewable energy and increased LNG imports, particularly from the US has enabled Europe to counter this challenge.

The Biden Administration assured support and supply of American LNG, helping stabilise gas prices which had increased to €350/MWh[viii], more than ten times higher than the average prices in the previous 15 years. The US and EU also formed a joint task force to reduce reliance on Russian gas and among other things to ensure a stable demand for US LNG in Europe till at least 2030[ix]. In November 2024, European Commission President Ursula von der Leyen suggested replacing Russian LNG with American ones, which could be an opportunity for the US to increase its market share and permanently replace Russian gas in Europe[x].

According to the International Energy Agency (IEA), European LNG imports are expected to rise by 20% in 2025 compared to levels before the start of the conflict in Ukraine. The pipeline supplies from Norway, North Africa and Azerbaijan have reached their maximum capacity and Russian gas pipelines transiting through Ukraine remain closed.

These developments have meant that, today Europe is the largest market for US LNG, with 55% of US LNG exports directed there in 2024. With US LNG being more important for Europe's energy security, President Trump’s call for Europe to increase U.S energy imports or face tariffs,[xi] highlights the role of energy as a bargaining tool for reducing trade deficits for the new US Administration.

The Energy Dominance Agenda: Prospects Under President Trump

An examination of Trump Administration’s policy trajectory during his first term and the initial days of his second term and key personnel appointments reveals a coherent strategic direction, favourable for the LNG industry. During his first term, President Trump's energy policy centred around what can be called as "Energy Dominance 1.0", which is a shift from the previous goal of "Energy Independence". This shift emphasises self-sufficiency while promoting increased production and export of energy resources, thereby enhancing the US' geopolitical leverage.   

The first Trump Administration implemented several policy measures aimed at bolstering the oil and gas sectors. This included repealing several environmental regulations like the Clean Power Plan (CPP) and methane regulations established under the Obama Administration. Additionally, President Trump's decision to allow offshore drilling and the withdrawal from the Paris Climate Agreement underscored his Administration's drive towards fossil fuel exploitation. He also called for expanded production of oil, natural gas, and coal, with a specific focus on maximizing exploration and development on federal lands[xii].

The Administration, actively promoted American LNG in high-level diplomatic engagements with European and Asian counterparts. Data from the US Energy Information Administration (EIA) indicates a robust and consistent rise of 318 % in LNG exports while the production increased by 26.5% between 2017-2021[xiii], signifying a successful implementation of the Energy Dominance strategy.  

In his second term, President Trump signed six Executive Actions to build on his Energy Dominance agenda[xiv] . A National Energy Emergency has been declared, granting the federal government more powers to expedite approvals for various energy projects. A new inter-governmental agency will be established to increase oil and natural gas production.

His cabinet appointments, notably Governor Doug Burgum as the nominee for Interior Secretary and as head of the proposed National Energy Council and Chris Wright, CEO of Liberty Energy, as the new Energy Secretary are expected to drive his energy dominance agenda forward and align energy production, diplomatic objectives and economic priorities together.

Conclusion

In summary, US LNG plays a multifarious role in addressing trade deficits, boosting the domestic economy and enhancing leverage in negotiations. By strengthening Europe's energy security and stabilizing markets against major disruptions, US LNG has become a vital tool of foreign policy and energy diplomacy. The global LNG demand is projected to be robust until at least 2050 and with increasing investments in export capacity expansion, the US is likely to dominate the market for a considerable period.

The energy dominance strategy under President Trump would provide a favourable environment for the LNG industry to prosper. Conclusively, US LNG is more than just a commodity, it is emerging as a strategic tool that can redefine energy security, US diplomacy, and global influence for the coming decades.

However, with many countries setting ambitious carbon neutrality goals and prioritizing sustainability and green energy to tackle climate change, the Trump administration's renewed emphasis on hydrocarbon exploitation may impede the transition to renewable energy and undermine efforts to combat climate change.

Furthermore, the US's entry to fill the vacuum left by Russia in the European energy sector will have significant repercussions on European politics, and consequently on world politics. This could prove detrimental, especially in light of the ongoing geopolitical turmoil and the intensifying US-Russia rivalry.

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*Saumyasingh Kshatriya, Research Intern, Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal. 

Endnotes

[i] Disavino, S. (2024, November 21). US natural gas drillers to lift 2025 output, reversing year of cuts. Reuters. https://www.reuters.com/markets/commodities/us-natural-gas-drillers-lift-2025-output-reversing-year-cuts-2024-11-21/

[ii] Major new US industry at a crossroads: A US LNG Impact Study – Phase 1 | S&P Global. (2024, December 20). S&P Global. https://www.spglobal.com/en/research-insights/special-reports/major-new-us-industry-at-a-crossroads-us-lng-impact-study-phase-1

[iii] Slav, Irina. 2025. “US LNG Exports Surged at The End of 2024.” OilPrice.Com, January 3, 2025. https://oilprice.com/Latest-Energy-News/World-News/US-LNG-Exports-Surged-at-the-End-of-2024.html#:~:text=The%202024%20total%20reached%2088.3,respond%20by%20ramping%20up%20production.

[iv] Thomas, V. (n.d.). Under both Trump and Biden-Harris, US oil and gas production surged to record highs, despite very different energy goals. The Conversation. https://theconversation.com/under-both-trump-and-biden-harris-us-oil-and-gas-production-surged-to-record-highs-despite-very-different-energy-goals-236859

[v] Barrasso, Cassidy Slam Biden-Harris LNG Export “Study.” (2024, December 18). U.S. Senate Committee on Energy And Natural Resources. https://www.energy.senate.gov/2024/12/barrasso-cassidy-slam-biden-harris-lng-export-study?form=MG0AV3

[vi] Congressional Energy Export Caucus Co-Chairs release statement on Trump’s lift on pause of LNG exports | Congresswoman Carol Miller. (2025, January 22). Congresswoman Carol Miller. https://miller.house.gov/media/press-releases/congressional-energy-export-caucus-co-chairs-release-statement-trumps-lift-0

[vii] Data has been compiled from “The European Union-Russia Energy Divorce: State of Play.” 2024. Bruegel | the Brussels-Based Economic Think Tank. October 17, 2024. https://www.bruegel.org/analysis/european-union-russia-energy-divorce-state-play.

[viii] Harper, J. (2023, January 9). Europe’s gas prices face uncertain future. dw.com. https://www.dw.com/en/europes-gas-prices-face-uncertain-future/a-64289690

[ix] Mission, Useu. 2023. “Joint Statement Between the US and the European Commission on European Energy Security - US Mission to the European Union.” US Mission to The European Union. May 31, 2023. https://useu.usmission.gov/joint-statement-between-the-united-states-and-the-european-commission-on-european-energy-security/.

[x] Reuters. (2024, November 8). EU may consider replacing Russian LNG imports with those from US, von der Leyen says. Reuters. https://www.reuters.com/business/energy/eu-may-consider-replacing-russian-lng-imports-with-those-us-von-der-leyen-says-2024-11-08/

[xi] Reuters. (2024, December 20). Trump threatens EU with tariffs over oil and gas imports. Reuters. https://www.reuters.com/world/us/trump-says-eu-should-make-up-tremendous-deficit-with-us-by-purchasing-its-oil-2024-12-20/

[xii] Presidential Executive Order on Promoting Energy Independence and Economic Growth – the White House. (2017, March 28). The White House. https://trumpwhitehouse.archives.gov/presidential-actions/presidential-executive-order-promoting-energy-independence-economic-growth/

[xiii] The Data was calculated using the following report. In 2021, both U.S. natural gas production and exports set new records - U.S. Energy Information Administration (EIA). (n.d.). https://www.eia.gov/todayinenergy/detail.php?id=54339

[xiv] Crooks, E. (2025, January 23). President Trump’s executive orders on energy | Wood Mackenzie. Wood Mackenzie. https://www.woodmac.com/blogs/energy-pulse/president-trumps-orders-on-energy/