US LNG Exports Spark Global Gas Crisis as Prices Soar
The third great natural gas crisis in eight years has left the world reeling. In October 2030, it's clear that the vulnerabilities that triggered this disaster were painfully obvious. After Russia's invasion of Ukraine cut off Europe from two-fifths of its gas in 2022, importers thought they had a safety net - the Persian Gulf and the US had plenty to spare.
However, when the 2026 war with Iran knocked out 20% of global LNG supply, America's booming fossil-fuel industry again promised to fill the gap. But this confidence now seems naive. US natural gas prices have been caught in a perfect storm: growth in shale output has faltered, extreme weather has hit a power sector crippled by former President Donald Trump's war on clean energy, and frontier AI labs are sucking up fossil fuels to power data centers.
The result is a global crisis. In the US, storage tanks were at record lows amid a polar vortex cold snap in February, driving benchmark Henry Hub prices above $10 per million British thermal units for the first time since 2008. The ripples spread quickly through the economy, with Iowa farmers planting their smallest spring corn crop in two decades due to tripling gas-derived fertilizer prices.
China's Fuyao Glass Industry Group Co. blamed gas prices when announcing the closure of an iconic glass factory outside Dayton, Ohio, with the loss of 2,000 jobs. Ford Motor Co. eliminated the second shift at its Wayne, Michigan, assembly line, citing rising energy and supply-chain costs. Another 2,000 workers were put on indefinite layoff.
The crisis has become a political hot potato. Democratic lawmakers in the northeast who had long sought restrictions on LNG exports found unlikely allies among Republicans watching one of the country's great competitive advantages - cheap energy - disappear. The President eventually signed the bipartisan Secure American Fuel for Everyone Act, declaring a gas supply emergency and ordering the Department of Energy to curtail exports within 30 days.
However, this move has only exacerbated the crisis. European gas storage was already running dangerously low after the same torrid El Niño summer, leaving importers heavily dependent on US shipments. Japan and South Korea were even more exposed, having restricted Chinese clean-energy imports in return for preferential access to US LNG. Russia is in no position to come to the rescue, its economy approaching Venezuela-style degeneration.
The situation in the Gulf offers little reassurance. Relations between Qatar and Iran's increasingly lawless government are deteriorating over the management of their vast shared offshore gas field. Australia, the world's biggest LNG exporter as recently as 2022, has imposed US-style export restrictions to shield domestic supplies.