The Department of Energy has come out early and often in support of liquefied natural gas exports under President Donald Trump — but there’s a limit to what the new administration can do.
The Trump DOE granted Commonwealth LNG’s request to export gas from Louisiana to countries without a free-trade agreement with the U.S. The application, which was approved in February, dates to 2019.
The department framed the Commonwealth decision as a return to “regular order” after a pause on LNG export approvals under former President Joe Biden. Still, while Trump’s DOE has shown its willingness to move quickly, observers say permit approvals for the super-chilled gas are only one piece of the puzzle in a business that requires customer contracts to make a project happen.
“I think the main obstacles we’re seeing really in the U.S. are more about commercial terms, competitiveness of U.S. volumes,” said Jason Feer, global head of business intelligence at ship brokerage and consulting firm Poten & Partners, during a recent webinar. “We’re seeing significantly higher project costs and liquefaction fees.”
Since mid-January, DOE has doled out a handful of similar approvals: a conditional approval, like Commonwealth’s, to Venture Global’s CP2 project in Louisiana; a February order around the transfer of LNG; and an export permit time extension for the Golden Pass LNG terminal in Texas, which is owned by QatarEnergy and ExxonMobil.
The non-FTA category makes up the majority of the world, meaning that approval is crucial to a project’s ultimate success. While the Federal Energy Regulatory Commission gave the facility a green light in 2022, Commonwealth sat waiting in DOE purgatory for years. FERC approves the siting and construction of onshore and near-shore US. LNG terminals.
The Trump administration “is actively advocating for U.S. LNG around the world, reinforcing that America is once again open for business and remains the world’s most reliable supplier of energy,” DOE spokesperson Ben Dietderich said in a statement late last month. “The significance of re-establishing regulatory certainty for LNG exports, as the Trump administration has done since Day 1, cannot be understated.”
It remains to be seen how the ongoing upheaval in global trade may affect U.S. LNG projects.
The so-called reciprocal tariffs Trump announced Wednesday exclude oil and gas, a move welcomed by the U.S. fossil fuel industry. Mike Sommers, CEO of the American Petroleum Institute trade group, said in a statement that Trump’s choice underscores “the complexity of integrated global energy markets and the importance of America’s role as a net energy exporter.”
DOE — now overseen by Energy Secretary Chris Wright — also recently sought to bolster its deregulatory record by rescinding a 2023 policy statement from the department that required developers of LNG terminals to meet certain criteria before DOE would consider any request to extend the deadline to start exports.
Original approvals by FERC and DOE are shown below.
In a statement last month, Interior Secretary Doug Burgum argued the Biden administration carried out a “full-on attack against American energy” by stopping permitting and crippling “capital formation.”
However, some projects with federal approvals in hand haven’t reached a final investment decision (FID), a key milestone when developers make a final commitment to move ahead. Multiple projects — slowed by factors such as the Covid-19 pandemic and litigation — have also sought time extensions, either from DOE on the deadline to commence exports or from FERC on their deadlines to complete construction.
At least one proposal, the Magnolia LNG project in Louisiana, allowed its DOE authorization to expire. Glenfarne Group, the company behind the proposal, is still pursuing the project and has submitted a new application.
Others, like the Lake Charles LNG project in Louisiana, have a DOE approval that will be expiring — and the department has yet to issue a new authorization. The company wrote in February asking DOE to act on its pending application.
Still, the Trump administration has made “progress in reducing regulations, encouraging LNG developments — obviously the pause, the Biden pause, was rescinded and we’re starting to see some approvals come through,” said Feer with Poten & Partners.
Hillary O’Brien, senior program director for carbon management and science at the clean energy group ClearPath, said other factors include rising construction costs, permitting delays and supply chain disruptions. O’Brien said the Biden administration’s pause on LNG export approvals also eroded the “economic, political and regulatory” certainty that developers need.
The Biden administration said DOE needed to update the economic and environmental analyses the department uses to decide if non-FTA applications are in the public interest. Biden’s DOE emphasized that there wouldn’t be a retroactive review of already approved non-FTA exports, and that the pause applied to pending or newly filed applications.
The pause eventually was tossed by a court, but the Biden administration didn’t push through a flood of new approvals. But in late August DOE issued a non-FTA authorization to New Fortress Energy’s floating LNG project near Altamira, Mexico.
The pause sent the wrong signal to the workforce needed to continue building LNG terminals, according to O’Brien. And even with early action from the Trump administration, it’s going to take some time for “those things to right themselves,” she said.
Developers of LNG terminals are competing not only with one another for a “fairly limited” pool of skilled tradespeople, but also with projects like data centers and pipelines, said Greg Bean, executive director of the Gutierrez Energy Management Institute in the Bauer College of Business at the University of Houston, in an interview.
“A lot of those draw on the same skill sets,” he said.
Charlie Riedl, executive director at the Center for LNG trade group, also noted the relative newness of the second Trump administration and said it’s going to take the administration time to work through issues like workforce development and rising project costs, if there’s an appetite to do so.
What’s needed?
Several LNG project developers declined to comment on when their projects might reach a final investment decision or what the Trump administration could do to boost them.
In March, Glenfarne, the lead developer of the Alaska LNG project, welcomed Trump’s mention of the project’s pipeline in his joint address to Congress. Competition remains for potential LNG buyers, or offtakers.
“There is tremendous momentum behind Alaska LNG from potential offtakers, financiers, and other partners eager to participate in this national energy infrastructure priority,” said Glenfarne and the Alaska Gasline Development Corp., another developer, in a statement at the time.
Sempra Infrastructure spokesperson Alejandro Larenas said the company is targeting a final investment decision in 2025 for the third and fourth trains of the Port Arthur LNG project.
“We expect to receive the DOE non-FTA permit in due course,” Larenas said in an email last month. “Regarding the proposed Cameron LNG Phase 2 project, the partners have concluded additional value engineering work and we continue to evaluate these materials as well as the time frame to make a final investment decision.”
And Cheniere, which secured FERC approval in March for trains 8 and 9 at its Corpus Christi facility in Texas, expects to have “all remaining necessary permits” to achieve a final investment decision on the project this year, said company spokesperson Bernardo Fallas in an email.
While some LNG projects are expected to reach a final investment decision this year, the competition for offtake agreements that lock in deals to buy LNG is getting increasingly competitive, said Oren Pilant, an energy analyst at the Colorado-based firm East Daley Analytics.
“Beyond the export approvals, I think at the moment the real issue or challenge with these projects we’re seeing moving forward is securing international offtake agreements,” Pilant said. “They need to find buyers for their LNG.”
“I think we’re maybe nearing the limit on sort of U.S. LNG export capacity … limited by international demand,” he added.
Pilant said China is shying away from U.S. LNG and Russian gas commitments, for example, and could instead turn to greater coal production and increased deployment of renewables. Although Europe looked to U.S. LNG as a more stable alternative to gas from Russia following that country’s invasion of Ukraine in 2022, he said, Trump’s trade wars are injecting new uncertainty into how cheaply European buyers can secure U.S. LNG.
Rob Jennings, vice president of natural gas markets at the American Petroleum Institute trade association, said Trump’s record signals that he wants LNG export projects to advance and the market should decide which projects are viable.
“A consistent theme here with his deregulatory efforts … is, let’s get unnecessary regulations out of the way and let the market — the supply-demand balance — decide which projects can move forward and which can’t,” Jennings said in an interview.
One major thing the Trump administration can do is to ensure that any approval it issues is legally resilient, said Riedl of the Center for LNG.
“The big thing that we’ve been telling everyone who will listen at the Department of Energy is that anything that they do post-study, we just want to make sure that they’ve done all they can, for any action that they take, to make sure that any authorizations are legally durable,” he said, adding that legal toughness supersedes the need to move fast.
O’Brien at ClearPath said the Trump administration has taken action to address project delays in the form of executive orders, like one aimed at “unleashing” U.S. energy and another forming the National Energy Dominance Council.
Some members of Congress have also sought to make an impact.
Last month, Rep. August Pfluger (R-Texas) and Sen. Tim Scott (R-S.C.) introduced a bill that would give FERC the sole authority to approve LNG exports — instead of DOE.
“I think that that’s the type of thing we would expect folks to be looking at when they’re thinking about their menu of options when it comes to fixing this problem,” O’Brien said.
DOE automatically issues an export approval to countries that have a free-trade agreement with the United States. For all other countries, the department has to decide whether LNG exports to those nations are in the public interest.
Jennings of the American Petroleum Institute said ensuring that FERC and DOE processes are “transparent” and “swift” will be important to LNG export projects moving ahead. Energy diplomacy is also key, he said.
“That’s a bit more of a kind of a soft move,” Jennings said. “It’s not regulatory or anything like that — legislative — but it’s just another helpful sign that the U.S. is open for business, and we would welcome the administration resuming those efforts from the first administration.”
