LNG Logjam

This Week's Trend In Brief:

• The traditional energy sector welcomed President Trump’s vow to restore “energy dominance” upon his return to office, but early policy moves are revealing growing tensions between Trump’s populist vision for the economy and the industry’s market-driven, globally oriented reality.

   

• In the latest clash of priorities, the Office of the U.S. Trade Representative has mandated that a portion of U.S. LNG exports be shipped on U.S.-built and flagged tankers and imposed additional fees on Chinese ships.

   

• While intended to boost U.S. manufacturing and independence, industry groups are warning that the lack of U.S.-built LNG tankers means the requirement is “not feasible” and risks disrupting the very export growth Trump seeks.

   

• The new rules and swift industry pushback are the latest example of how Trump’s populist vision for the U.S. economy can clash with the energy sector’s keen interest in his “energy dominance” promises, introducing new complications that disrupt, not accelerate, those shared ambitions.

   

• Navigating these complexities will require a careful, strategic approach to ensure companies can thrive regardless of the political winds, and a proven playbook to anticipate curveballs and mitigate their impact.

Digging Deeper:

President Donald Trump’s vow to restore “energy dominance” in a second term was initially met with much enthusiasm across the traditional energy sector, but early policy moves are revealing growing tensions between Trump’s populist vision for the economy and the industry’s market-driven, globally oriented reality. While Trump remains focused on fossil fuel expansion and reshoring supply chains, the industry’s priorities have broadened, balancing oil and gas growth with new technologies such as renewables, carbon capture, and hydrogen, complemented by LNG exports to stay competitive in a rapidly evolving global market. That divergence is increasingly visible in recent policy moves that complicate, rather than complement, the growth path many companies have been pursuing. Now, industry groups must contend with the latest schism as Trump’s push to unleash U.S. energy resources comes into conflict with industry priorities and expectations.

In the latest clash of priorities, the Office of the United States Trade Representative (USTR) mandated that a share of U.S. LNG exports be shipped on U.S.-built and flagged tankers and imposed additional fees on Chinese ships. The move specifically aims to “encourage domestic shipbuilding and undermine China’s maritime power,” the result of a petition filed by labor unions during the Biden Administration requesting a federal investigation into Chinese shipbuilding. Shortly before Trump’s election, the Biden Administration announced it had determined “China had used unfair trade practices like subsidies to become dominant in shipbuilding.” While the Trump Administration has framed the rules as a way to counter Chinese influence while bolstering manufacturing, industry groups became concerned that they could harm, rather than assist, industry in unleashing U.S. LNG. The USTR “softened an earlier proposal after pushback from many industries and trade groups,” but the same industries and groups remain concerned the revised rules would still harm industry more than help.

Yet industry groups warn no such U.S.-built LNG tankers exist or could be built in the near future, making the requirement “not feasible” and likely to disrupt the very export growth Trump seeks. The rules would specifically require that “1 percent of LNG exports, by volume, to be done on U.S.-built and flagged ships by 2029.” But according to Gas Outlook, “there are no LNG tankers built in the U.S. and no ability to build any in the near future.” Industry groups have highlighted that concern among others, warning that “individual exporters that do not comply could lose their export licenses.” In a letter led by the American Petroleum Institute (API), industry groups stated the move “risks counteracting the significant progress the Trump administration has made toward reducing uncertainty and unleashing U.S. L.N.G.”

The new rules and swift industry pushback are the latest example of how Trump’s populist vision for the U.S. economy can clash with the energy sector’s keen interest in his “energy dominance” promises. That tension is becoming a pattern, resurfacing across multiple fronts where Trump’s goals diverge from industry’s priorities. Just weeks earlier, House Republicans passed a budget that would repeal key clean energy provisions from Biden-era legislation, which Trump has dubbed the “Green New Scam.” However, many in the energy sector have already made significant investments in low-carbon technologies due to these provisions, aiming to meet net-zero commitments to investors and preserve long-term market viability. More recently, Trump’s “ever-changing policies on tariffs and trade” has many in industry, from oil to solar, concerned a trade war will harm the entire sector, even with exceptions aiming to mollify industry.

For energy industry public affairs professionals, the new LNG tanker rules underscore the need to understand not just what the Trump Administration is doing, but who is shaping those decisions behind the scenes. While the rhetoric of “energy dominance” may suggest alignment with industry, the reality is more fragmented, with competing factions inside the Administration advancing conflicting priorities. Just as important are the outside forces, such as think tanks, advocacy groups, and campaign donors, who influence internal debates and shape the policy direction from the perimeter. Navigating this environment means identifying potential allies among external stakeholders and within the executive branch, anticipating opposition from those with narrower agendas, and engaging early to shape outcomes before positions harden. As global market pressures and state-level regulations continue to evolve, companies must prepare for a federal landscape where traditional assumptions no longer hold, and success will depend on a nuanced understanding of the full spectrum of political, regulatory, and advocacy stakeholders influencing policy from the inside out.

Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.