Asia’s Risky Bet on Costlier US LNG Amid Trump’s Energy Push

Asia is at the heart of a major push to expand U.S. liquefied natural gas (LNG) exports, but this strategy comes with significant costs. The Trump administration’s drive for U.S. LNG export dominance coincides with rising production expenses. Analysts project that the wholesale price of U.S. gas (Henry Hub) will climb steadily over the next decade, potentially reaching 80% higher than the past decade’s average by 2040. Since U.S. LNG prices are tied to Henry Hub, Asian countries will face higher costs for this energy source.

Japan is playing a crucial role in this fossil fuel dependence. It aims to secure its position in global fossil fuel markets and diversify its energy sources by investing heavily in fossil fuel expansion. This push is reinforced by President Trump’s efforts to pressure Japan into further fossil fuel investments. Japan has announced a USD 10 billion framework to help Asian countries procure oil and gas and plans to support pipelines bypassing the Strait of Hormuz. Additionally, Japan agreed to invest $550 billion in U.S. projects, with over $68 billion allocated to oil and gas projects, deepening its reliance on U.S. gas at the expense of renewable energy investments.

The expected surge in U.S. LNG exports could coincide with rapid growth in domestic U.S. gas demand. The Trump administration’s energy dominance and artificial intelligence (AI) agendas have spurred a wave of LNG export facility and data center construction. Planned data centers are tied to gas power plant expansion, which could double U.S. LNG exports by the early 2030s. Gas demand for power generation is estimated to increase 50% in the coming decade, pushing producers to invest in costlier production methods. Japanese companies have invested heavily in the costly Haynesville gas region, positioning themselves to benefit from rising gas prices but risking deeper fossil fuel lock-in and higher consumer costs.

The fossil fuel industry views Asia as key to absorbing new LNG supply. However, building new gas infrastructure in response to short-lived low LNG prices risks locking countries into decades of dependence on expensive and volatile imported fuel. Asian governments face a choice: deepen reliance on costly imported LNG or accelerate the transition to renewable energy, electrification, and efficiency. Japan should resist U.S. pressure to underwrite further fossil fuel expansion and redirect investment toward reducing gas demand and advancing renewable energy across Asia.