Shock from Iran war has Trump’s vision for US energy dominance flailing
The closure of the Strait of Hormuz has blocked tankers from Qatar and the United Arab Emirates, which together supply 20% of the world’s LNG. Asia has been particularly hard hit because it imports 80 to 90 percent of its supplies from the Persian Gulf. Reopening the strait will not restore all of the lost supply. In mid-March, Iranian missiles destroyed 17 percent of the capacity of Qatar’s Ras Laffan refinery, and the CEO of QatarEnergy said repairs could take five years.
The United States has made aggressive efforts to take a larger share of the global LNG market, with Trump seeking to strike major purchasing deals with trading partners like Japan, the EU and South Korea. But the eight existing U.S. LNG export terminals are already operating at full capacity. Although Trump has pledged to bring more capacity online, the complex, multibillion-dollar facilities take years to build and permit.
As a result, U.S. LNG exports, approximately 15 billion cubic feet of gas per day, are currently limited to just 11 to 13 percent of total U.S. natural gas production. The situation leaves the United States with an abundance of its main fuel for electricity, even as other countries scramble to expand their supplies.
But U.S. consumers are facing sharply rising electricity prices for a host of reasons unrelated to the war — primarily due to utility companies building up capital, partly to cope with the explosion of data centers, but also to build resilience against wildfires, storms and other impacts of climate change and to replace aging infrastructure.
In their bimonthly video series, analysts at the Center for Strategic and International Studies examined how the best example of U.S. energy independence goes almost completely unnoticed by American consumers because of these other factors.
“As we are on the brink of a global energy crisis, or perhaps already in one, the United States is going to feel this in the oil markets, but we are, for the moment, insulated from gas price shocks, by the nature of the gas system and the abundant supply here in the United States?” asked Joseph Majkut, director of the Energy Security and Climate Change program at CSIS.
