The United States’ vast stores of natural gas have become President Donald Trump’s go-to solution for many of the big problems he’s facing.
Trade deficit? Tell other countries to buy natural gas. Looming power shortages for data centers? Just use gas.
“We do seem to be moving into a new era of gas,” said Barry Rabe, a professor emeritus of environmental policy at the University of Michigan.
Rabe said Trump seems to want gas to be the dominant domestic power source and make the U.S. a dominant provider of gas exports. But, he said, “that seems like a pretty tall order.”
Industry analysts say Trump’s grand plans for the fuel could jeopardize a number of his priorities — starting with keeping energy prices low. Trump pledged on the campaign trail last year to cut energy costs in half within 18 months.
The United States has plenty of natural gas in the ground, analysts note, but it lacks the pipelines and other infrastructure needed to serve — on top of existing needs — the data centers Trump is promoting and the export deals he’s announcing.
His tariffs risk raising the price on steel and other ingredients for such infrastructure to the point where developers can’t make money building that infrastructure.
Beyond that, the president faces a challenge from capitalism itself. Trump can offer incentives, but he can’t require companies to sell the volumes of gas he wants exported. And he can’t force private companies in most foreign countries to buy it.
“You can go back all the way to the ‘70s and look at presidential proclamations to do all sorts of things on the energy front,” said Kenneth Medlock, an energy economist at Rice University’s Baker Institute for Public Policy. “It helps kind of shape things at the margin, but the market ultimately drives what happens.”
Trump and his administration have worked overtime to clear a path for that energy infrastructure — declaring a national energy emergency and taking a chain saw to regulations addressing climate change. His Cabinet members have traveled to energy-rich states like Alaska to tout an energy dominance agenda.
White House officials responded to detailed questions about Trump’s policies on gas production and how they play into his trade agenda by noting his support for exporting liquefied natural gas.
“President Trump is leveraging every tool of government to boost natural gas production and LNG exports,” Harrison Fields, a White House spokesperson, said in a statement emailed last week to POLITICO’s E&E News. “This stands as a major priority and success for President Trump, as we’ve already witnessed significant demand and interest from our trading partners for more American LNG.”
On Monday, Energy Secretary Chris Wright further advanced U.S. LNG by signing a final authorization for more exports to countries without a free-trade agreement from Venture Global’s Calcasieu Pass facility in Louisiana.
The effect of gas exports on prices remains hard to pin down. Natural gas prices have stayed low or gotten lower even as U.S. exports have gone from basically zero to world-leading in the past nine years. Some experts are warning of a global LNG glut that could sink prices.
But the U.S. Energy Information Administration says it expects LNG to be the biggest driver of increased demand that will push prices higher in 2025 and 2026. It’s projecting the average spot price will roughly double from 2024 to 2026, to an average of $4.40 per million British thermal units.
On Monday, benchmark U.S. gas prices were trading for less than $3 per MMBtu. Generally, $4 per MMBtu is considered the threshold between low and high prices.
Tariffs — Trump’s top economic policy — present a more direct threat to his promise to slash energy prices in half. By raising prices on steel and other products, they could make it more expensive to produce and deliver oil and gas, along with other sources of energy.
Pipelines and exports
Eugene Kim, research director of the American gas team at Wood Mackenzie, said that although the U.S. has an adequate supply of gas to meet demand, there are “many factors in getting those low-cost supplies to the marketplace.” An obvious one is pipelines.
Some developments — like the Supreme Court’s May ruling limiting the scope of agencies’ environmental reviews — are helpful to pipeline projects. Others, such as higher costs to build because of steel tariffs, work in the opposite direction, Kim said.
While streamlining permitting regulations may be advantageous, he said demand is what ultimately matters.
“If we talk about whether you’re going to build that pipeline or not, you need to have a consumer at the end of the pipe,” Kim said. “If we just look at power demand, is there someone who needs to provide or needs that gas to increase their power, in order to build a data center? Is there someone willing to sign up for that pipeline?”
Natural gas has become a centerpiece of the Trump administration’s energy strategy, according to Brigham McCown, senior fellow and director of the Hudson Institute’s Initiative on American Energy Security.
“It’s also central to America’s efforts to reduce European reliance on Russian gas and to counter China’s energy diplomacy in Asia and Africa,” he said.
Roadblocks include the need for permitting reform, sustained opposition to energy projects from environmental groups and some states, and supply chain issues, McCown said. The gas industry agrees.
“Congress must pass real and durable permitting reform and associated judicial review for energy projects to enable our industry to deliver the energy capacity our nation needs,” said Karen Harbert, CEO of the American Gas Association, in a statement Monday.
In the United States’ trade deal with the European Union, the bloc said it “intends to procure” liquefied natural gas, oil and nuclear energy products to the tune of $750 billion over the next three years, or $250 billion a year. Trump and European Commission President Ursula von der Leyen announced the deal on tariffs and trade last month.
But in the past year, said Fauzeya Rahman, editor and LNG specialist at the commodity research group ICIS, the total amount of LNG exports to all countries from the U.S. was only about $55 billion.
“The EU’s pledge of up to $750 billion a year in US energy purchases over three years is widely seen as unrealistic, adding uncertainty to market sentiment,” Masanori Odaka, vice president of gas and LNG research at the Rystad Energy analysis and consulting firm, said in a statement.
Alan Alexander, a partner at the Vinson & Elkins law firm whose practice focuses on energy and infrastructure development, construction and financing, said the U.S.-EU agreement on energy is “more about the signal that Europe will look to the U.S. to help satisfy its energy needs.”
It’s likely a “gesture the Europeans were largely willing to make because they’d been doing it since about 2022” after Russia launched its invasion of Ukraine early that year, he said.
And Geoffrey Pyatt, former assistant secretary of State for energy resources under then-President Joe Biden, pointed to a statement last week from the European Commission outlining what the EU-U.S. trade deal projects for energy. Pyatt said the document reaffirmed Europe’s desire to rid itself of Russian energy by the end of 2027.
The supercooled gas also featured in a U.S. deal with South Korea, with Trump saying in a Truth Social post, “South Korea will purchase $100 Billion Dollars of LNG, or other Energy products.”
Power demand
A December report from the Lawrence Berkeley National Laboratory said U.S. data center energy use reached 176 terawatt-hours in 2023 — the equivalent of 4.4 percent of total U.S. electricity consumption.
Computing, which includes energy consumption from data center servers and other equipment, is expected to account for 20 percent of commercial sector electricity consumption by 2050, the Energy Information Administration said in a report this year.
Kim at Wood Mackenzie said Trump “rightfully acknowledges the key to the AI race is access to energy,” adding that “without energy, you can’t grow your AI industries here in the U.S., because they require huge amounts of power.”
In addition to available land, data center developers also have to factor in proximity to power.
“So the closer you can get to the natural gas or the energy source, the lower the pipeline cost and the less money the midstream is looking to recover, so it lowers the overall cost of operating a power plant,” said Alexander with Vinson & Elkins.
Alexander said he’s “very optimistic” about the future of gas because he has seen the U.S. energy industry “consistently rise to meet the challenges put in front of it” over the past 15 years.
Trump’s first-term energy policy, Rabe said, revolved a lot around coal. But that did not change coal’s overall trajectory.
Nearly 40 percent of the U.S. coal fleet shut down during the past 10 years, EIA figures show. About 48 gigawatts of coal capacity shut down between 2017 and 2020, the highest four-year total among the Obama, Trump and Biden administrations.
With gas, Trump has a lot more to work with. The United States has the world’s fifth-largest gas reserves. And people want it. The International Energy Agency forecasts natural gas demand growth will accelerate in 2026, sending total demand to an all-time high.
In promoting gas, Trump is ignoring the pleas from scientists who say the continued burning of fossil fuels threatens more climate change-fueled disasters. In fact, he’s thwarting efforts to study and reduce the effects of climate change.
Environmentalists say that by encouraging the construction of fossil fuel infrastructure designed to last decades, he is increasing the world’s dependence on them as an energy source.
Trump’s critics question whether his pro-gas policies will even accomplish his goals. Gas alone, they argue, cannot meet all of the nation’s power needs, particularly as data center demand increases.
“Gas just can’t fill some of these gaps,” said Talia Calnek-Sugin, a senior policy advocate at the Natural Resources Defense Council.
She said it can take 18 months to build a data center but four times that long to build a gas-fired power plant because of shortages in turbines and workers. Renewable energy would be cheaper and faster, she said.
But if renewables really are cheaper and faster, the Baker Institute’s Medlock said, project developers will turn to them instead of gas. That’s true, he said, even without the renewable subsidies revoked by the Republican megalaw that Trump signed last month.
Next 18 months
Trump has gone beyond simply canceling incentives. His Interior secretary, Doug Burgum, is demanding secretary-level approval for any renewable projects on federal land, an extra layer of bureaucracy that could slow approvals. And an order Burgum issued last week targeted wind and solar, suggesting that no such projects are acceptable for federal land.
And Trump even temporarily halted work on a large wind energy project off the coast of New York amid efforts to push state officials to approve two new gas pipelines.
Oil and gas companies have complained for years about bureaucratic hurdles for energy projects like pipelines. And Trump swiftly took a machete to them upon taking office with a barrage of executive orders and declaration of an energy emergency.
Trump’s return to power has spurred optimism among the companies that build and operate big gas transmission pipelines. Amy Andryszak, CEO of the Interstate Natural Gas Association of America, which represents those companies, said member companies have received “a record number of proactive inquiries” from potential customers in recent months.
“A number of members are already announcing new or revived pipeline projects,” Andryszak said in an emailed statement. She expects more will seek federal approval “over the next 18 months.”
But experts have cautioned that Trump’s administrative moves could backfire and slow projects, if judges determine that his administration let developers skirt environmental laws. Energy advocates say any progress on permitting is temporary and fragile until Congress can pass permanent laws changing the process.
That’s what manufacturers want, said Paul Cicio, president of the Industrial Energy Consumers of America. And he thinks Congress can get it done this year.
“There is an understanding on the part of both parties that our grid is inadequate for the demand,” Cicio said, “whether the demand is for data centers or homeowners or for manufacturers.”
In addition to supporting a streamlined permitting process, Cicio is one of the loudest voices warning about the potential effect of LNG exports on consumer prices. He says more exports mean less supply for customers in the United States. Data centers are another strain.
“We’re concerned that that demand is growing faster than natural gas pipeline capacity,” Cicio said.
