The breathtaking expansion of U.S. gas exports in the last decade has reshaped global markets, but a looming global oversupply along with rising power prices domestically could leave the industry exposed on both sides of its value chain.
The U.S. has become the world's top exporter of liquefied natural gas (LNG), thanks to its abundant gas supplies from onshore shale. Energy Secretary Chris Wright expects LNG to overtake oil as the top U.S. export in the coming years.
President Donald Trump's administration has touted LNG purchases as the best way for countries to reduce their trade deficits, and Europe's purchases of U.S. LNG are playing a key role in efforts to end the region's reliance on Russian energy. The super-chilled fuel has therefore become a critical political tool as well as an economic juggernaut.
But the U.S. LNG industry risks being a victim of its own success.
The rapid build-out of American gas liquefaction capacity in recent years is poised to create a huge global supply glut, possibly comparable to last decade's surge in U.S. shale oil output, which led to one of the biggest downturns in the sector's history.
President Donald Trump's administration has touted LNG purchases as the best way for countries to reduce their trade deficits, and Europe's purchases of U.S. LNG are playing a key role in efforts to end the region's reliance on Russian energy. The super-chilled fuel has therefore become a critical political tool as well as an economic juggernaut.
But the U.S. LNG industry risks being a victim of its own success.
The rapid build-out of American gas liquefaction capacity in recent years is poised to create a huge global supply glut, possibly comparable to last decade's surge in U.S. shale oil output, which led to one of the biggest downturns in the sector's history.
The issue in the domestic U.S. gas market is quite different. While an LNG supply glut should weigh on global prices, domestic U.S. gas prices could actually rise in coming years due to slower deployment of renewable power and a spike in energy demand driven by the artificial intelligence boom.
Trump's "Big Beautiful" tax bill, signed into law on July 4, slashed around $500 billion worth of tax credits for low-carbon energy projects that were introduced by former President Joe Biden.
The tax credit cuts led research firm Wood Mackenzie, opens new tabto reduce its estimates for solar power deployment by 35% by 2030 compared with forecasts one year ago. Wind capacity additions over the next decade are expected to be almost one-quarter lower than previous estimates.
At the same time, U.S. electricity demand could spike in the coming year, due to the growth of data centres powering the AI industry. They are expected to account for nearly half of U.S. electricity demand growth through the end of the decade, according to the IEA.
