Trump's AI and energy push to drive up EU LNG costs
The European Union is facing higher costs for liquefied natural gas (LNG) due to the Trump administration's push for energy dominance and artificial intelligence-driven demand. The EU's reliance on U.S. LNG has grown since Russia's invasion of Ukraine, and the Trump administration's lifting of a pause on new LNG export permits is expected to double U.S. LNG export capacity by the early 2030s.
Analysts project that the wholesale price of U.S. gas (Henry Hub) will rise steadily over the next decade, potentially becoming 80 percent higher than during the past decade of U.S. LNG exports. This increase is driven by the need to invest in costlier gas production, particularly in the Haynesville region, where drilling is more technically challenging.
The EU and the United States signed an agreement in July 2025, committing the EU to purchase $750 billion worth of U.S. LNG, oil, and nuclear energy products through 2028. However, this target is widely seen as unattainable. The surge in U.S. LNG exports coincides with rapid growth in domestic U.S. gas demand, fueled by the Trump administration's AI agenda, which has triggered a wave of data center construction powered by gas.
The EU Methane Regulation, adopted in August 2024, aims to curb methane emissions from fossil fuels. However, the regulation has faced pressure from the fossil fuel industry and exporting states, leading to a recommended suspension of its penalty regime for three years. Rapid implementation of the EUMR could help the EU set standards for imported gas and reduce its fossil fuel dependency.
The ongoing energy crisis has sparked debate about the need for the EU to end its fossil fuel dependency. EU decision-makers are urged to support gas demand-reduction measures, increase electrification, and improve energy efficiency to ensure a just transition away from fossil fuels.