US Has China Over a Barrel on Gas Exports

The Russian invasion of Ukraine has cast into sharp focus European dependence on Moscow’s natural gas and oil.

NATO allies have been reluctant to press for an embargo on Russian trade because of their dependence on Russian oil and gas for approximately 40% of their needs.

But as China threatens Taiwan and aids the Russian invasion, we need to appreciate the enormous weapon President Donald Trump has put into our hands to discipline Beijing.

China’s dependence on U.S. natural gas exports is almost as extreme as Europe’s dependence on Russia. And, within a few years, it will be even more so.

It did not used to be.

When Trump took office in 2017, U.S. natural gas exports to the rest of the world totaled only 2 trillion cubic feet per day, but a small portion of the 5.3 trillion cubic feet in global demand for gas exports.

But Trump went to work to increase dramatically, and suddenly U.S. exports of liquefied natural gas (LNG). By the time he left office, the U.S. was exporting 10 billion cubic feet per day and, the next year, exports rose to 12 billion cubic feet per day.

The United States, under President Trump, increased its exports of LNG from 2 billion cubic tons per day in 2017 to 10 billion in 2021 and 12 billion in 2022.

The U.S. is now supplying China with about 20% of its natural gas, up from almost nothing when Trump took office. In a few years, China will be as dependent on American LNG exports as Europe is on Russian natural gas supplies.

Most Russian gas arrives in Europe via pipelines while shipments to China must come by ship after the gas is liquefied.

The U.S. now has six liquefication plants operational and a dozen more being built or approved and awaiting construction.

The U.S. is now the world’s leading exporter of natural gas.

It takes about four years to build an LNG plant and costs upwards of $250 million.

Unfortunately, eleven LNG plants have been canceled in 2020-21 due to pressure from environmental groups.

These misguided green advocates have killed the plants, leading to an ever greater Chinese dependence on coal for electricity. Coal has twice the carbon footprint of natural gas.

As a result of Trump’s crash program to export LNG, natural gas prices in the U.S. have been relatively level, rising only slightly in 2021-2022.

But prices in Asia and Europe have soared by up to 30%.

But it is one thing to have this kind of leverage and another to have a president willing to use it.

The U.S. should warn China that it faces an embargo of U.S. gas shipments if it invades Taiwan or continues to help Russia cope with the global embargo imposed after the Ukraine invasion.

Donald Trump’s foresight has given us tremendous clout in dealing with energy-poor China, and we should be flexing our muscles to discipline China.

Dick Morris is a former presidential adviser and political strategist. He is a regular contributor to Newsmax TV. Read Dick Morris' Reports — More Here.