Taking the Asia-US LNG conversation from Washington to Houston

– by Paul Everingham

Fresh from a series of substantive meetings with senior US government officials and members of Congress in Washington, D.C., I’m excited to be in Houston to engage in further important conversations about Asia’s energy future and the role US LNG can – and should play – as a decarbonising force.

My second year at CERAWeek is certain to involve discussions on the LNG pause, and I expect that global energy security will figure greatly in the conversations as well. That topic arose at nearly every one of the nearly 20 meetings I had in Washington.

The US is a guarantor of global energy security, an observation made recently by a senior European Commission official. ANGEA’s members and Asian governments are acutely aware of that reality.

That is why ANGEA is working to support a rapid completion of the US Department of Energy’s export approval review, so future export decisions can be made. National interest determinations like this review are ordinary occurrences around the world, and in that respect, the US one is no different.

What is different is the speed and surprise that attended the announcement. There is concern in Asian nations that this could introduce sovereign political risk into energy planning processes to chart a lower-carbon future for the coming decades.

This includes Japan, South Korea, Singapore, Taiwan and Thailand, all of which are already significant users of gas and imported LNG. There are also countries such as India, the Philippines and Vietnam, which see a pathway through LNG use to curb their reliance on coal.

Policymakers in all of these countries have to make decisions now about what their energy systems will look like decades into the future. The signal they are receiving right now is that US LNG may not be an energy source they can rely on for the 2030s and beyond.

As I emphasized in my meetings, it is important that gas-producing countries like the US understand the unique energy landscape of Asia. The region is a net importer of energy where many fast-growing countries with emerging economies remain reliant on high-emitting coal for power generation. This is something they uniformly want to change.

Access to affordable LNG provides an opportunity to decarbonise power systems in Asia while meeting energy demand that will rise significantly over the next 30 years. We have already seen the US use gas to decarbonise its own power sector, with coal-to-gas switching being responsible for more than 60% of emissions reductions in domestic electricity generation since 2005.

Nations in Asia hope to replicate this environmental success. LNG is critical to that process because it is a scalable, exportable decarbonisation solution.

That is why it is vital for US LNG export approvals to be resumed as soon as possible, so Asian policymakers can make critical decisions about their countries’ futures without uncertainty and sovereign political risk.

I urged American policymakers to look at credible LNG demand projections from within Asia. Bodies that know Asia best identify LNG demand in the region growing through to 2050 and possibly beyond.

The Institute of Energy Economics, Japan, is one of the globally relevant and highly-regarded organisations that makes such a projection.  In addition, a 2023 report by Rystad Energy found that the full US export potential for LNG must be activated by 2040 to meet Asian demand in energy transition. This is 52% more export capacity than is currently approved.

As the world’s largest LNG exporter, any restriction on future US exports would have a major impact on global markets. Unfortunately, when LNG becomes more scarce or unaffordable for emerging Asian nations, it’s inevitable that coal use will become more prolonged and entrenched.

I look forward to exploring this issue more and having impactful, positive conversations over the coming days at CERAWeek.

Paul Everingham is the inaugural CEO of the Asia Natural Gas and Energy Association (ANGEA), which works with governments, society and industry throughout Asia to build effective and integrated energy policies that meet each country’s climate objectives. Connect with him on LinkedIn.