Henry Kissinger is said to have remarked, “Whoever controls energy sources can control whole continents.” Whether he actually said it or not, the idea holds weight. Energy geopolitics shapes the world stage today as much as ever, and nowhere is that more evident than in Europe.
When Russia invaded Ukraine, it exposed the fragility of global energy systems. Pipelines went dark, exports ground to a halt, and Europe scrambled to replace Russian gas. The ripple effects of this sudden shift were felt worldwide, underscoring just how tightly interconnected – and vulnerable – our energy networks are.
The International Energy Agency (IEA) has been clear: the global gas balance is precarious. Demand continues to rise while supply remains constrained, forcing Europe to rethink how it powers itself. Liquefied natural gas (LNG) became a lifeline, particularly from allies like the US. But this shift also raises serious questions about the risks of energy dependence.
Now, as President Donald Trump lifts the US moratorium on new LNG export licenses, it begs the question: could this be the lifeline Europe needs – or a spark for even greater geopolitical tension?
US LNG on the rise
The US government’s renewed focus on LNG exports has been years in the making. Even before former President Joe Biden halted new LNG permit approvals in 2024, several large-scale projects had already been greenlit. Now, with Biden’s moratorium lifted, the US is expected to ramp up its LNG export capacity, potentially reaching 200 million tonnes per annum (MTPA) by 2030.
Several high-profile projects are central to this growth. Venture Global’s Plaquemines LNG and Cheniere Energy’s Corpus Christi expansions are expected to add at least 30 MTPA capacity, while the Golden Pass LNG project – a joint venture between ExxonMobil and QatarEnergy – is set to begin production in 2025, boasting a peak capacity of 18.1 MTPA. In Texas and Louisiana alone, eight previously halted projects could add another 100 MTPA.
Frank Richards, President of the Alaska Gasline Development Corporation, has praised the Alaska LNG initiative for its “significant strategic, economic, and environmental benefits.” Its developers estimate the project will generate $10 billion annually for the US, create thousands of jobs, and reduce carbon emissions by up to 2.3 billion tonnes over its 30-year lifespan.
However, Amy Myers Jaffe, an energy and geopolitical consultant, warns of the risks involved. “The industry has a tendency to overbuild and overproduce,” she cautions. “If someone spends five years developing an LNG plant that’s not currently under development, are you going to have a market for it when it gets built?”
In addition to market risks, the environmental impacts of oversupply and expansion loom large. LNG production can lead to higher methane emissions and disruptions to marine ecosystems, threatening both local and global environmental goals.
Energy dependence and geopolitics
While LNG has helped Europe weather its energy crisis, it has also reignited concerns about dependency. Germany’s Economy Minister Robert Habeck recently cautioned, “In a world in which we have to expect energy supply chains to be exploited for power politics, energy dependency is always a problem.”
Such warnings are not unfounded. Despite efforts to reduce reliance on Russia, Europe imported record volumes of Russian LNG last year. According to analysts, discounted prices and efforts to ship before sanctions took effect drove these purchases, complicating the narrative of energy independence.
Meanwhile, Europe’s long-term energy strategy continues to evolve. Major renewable energy investments are reshaping the continent’s energy landscape. Germany, for instance, has ramped up wind and solar projects, aiming to meet ambitious decarbonisation goals. Denmark is spearheading offshore wind developments, while Spain is accelerating solar farm installations.
With these initiatives, Europe’s LNG imports are already declining. Following a relatively mild winter, demand softened, and the EU’s 2030 decarbonisation targets aim to further cap natural gas usage.
The risks of oversupply
The US LNG industry faces its own challenges. Overproduction could leave producers grappling with stranded assets and diminished returns. Jaffe warns that the rush to build new projects risks undermining long-term sustainability. “At some point, more is not necessarily better,” she notes, stressing that environmental and market dynamics must be considered.
Domestically, the US must also contend with potential price impacts on its own energy consumers. Increased LNG exports can drive up domestic natural gas prices, affecting everything from heating costs to industrial operations. Additionally, the infrastructure required for LNG export – such as pipelines and liquefaction terminals – can face local opposition due to environmental and community concerns.
The US’s growing dominance in LNG exports highlights its role as a key player in global energy markets. Yet, the sustainability of this market remains uncertain. While US projects promise short-term economic gains, they also face geopolitical, environmental, and market risks.
For Europe, reliance on US LNG provides a buffer against energy crises but comes at a cost – financially and strategically. As the EU accelerates its transition to renewables, the future of LNG as a global energy linchpin may be on borrowed time.
The energy decisions made today will ripple across decades, shaping not just markets but geopolitics and the environment. In the words of Robert Habeck, energy dependency is always a problem – and for both Europe and the US, the question is whether LNG can be part of the solution or a catalyst for new challenges.
