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HOUSTON — A trio of countries has orchestrated the global trade in liquified natural gas as it’s grown into an energy mainstay for the world over the last 30 years.

The Persian Gulf emirate of Qatar built the foundation, the United States has added flexibility and Japan is providing the demand.

In the process, the shipped natural gas trade has reshaped worldwide energy markets and geopolitics. The trio now aims to make the super-cooled commodity — better known by its initials LNG — a major force in the world’s energy future.

“We’re hoping to pick up the pace,” U.S. Energy Secretary Chris Wright recently told reporters at a major oil and gas conference in Houston as he signed off on the new administration’s fourth LNG project approval with a flourish.

As part of its global tariff blitz, the Trump administration is pressuring Europe and other countries to purchase more U.S. LNG. It’s also urging the Japanese and South Korean governments to pull the trigger and help finance a long-discussed LNG project in Alaska that could ship supplies directly to Asia across the Pacific.

LNG is controversial and complicated to categorize.

Imported gas could be a replacement for some coal — the dirtiest of energy sources — in some of the most coal-dependent countries where there are no natural gas deposits. But according to at least some research, LNG might be almost as bad or even worse for the climate than coal when the entire process of extracting and delivering it is taken into account.

“You could end up with something that’s far worse than what you’re replacing, the fossil fuel status quo,” said Beth Trask, vice president, global energy transition at the Environmental Defense Fund.

LNG also competes with much cleaner but less flexible solar and wind power, especially in countries that shelter the coal industry from competition. That could depress the growth of renewables.

Love it or hate it, LNG has reached a watershed. Gas is the only fossil fuel where demand is still growing strongly. And the LNG industry is one of the main drivers, as it finds new markets in energy hungry corners of the world far removed from gas reserves. Where, how and for how long LNG is used will profoundly shape global efforts to cut greenhouse gas emissions and avoid the worst fallout from global warming.

Climate impact

Natural gas burns cleaner than coal, but leaks methane, its main component and also a major contributor to global warming. Plus the process of cooling, compressing and transporting LNG both consumes a lot of energy and creates more opportunities for methane to leak.

Researchers disagree on LNG’s overall climate impact. One controversial academic study, originally published in 2023 and revised last year, found the impact of U.S. LNG could be one-third higher than that of coal. Other studies have concluded that U.S. LNG causes lower emissions than coal.

Under the climate-concerned Biden administration in the U.S., a debate raged over whether LNG should be encouraged as a “bridge fuel” between fossil fuels and a clean-energy system free of fossil fuels.

Under the Trump administration, a push is on to make LNG a growing part of the energy system for the foreseeable future. It is seen as especially promising in countries that already have import facilities, gas pipelines and gas-powered electricity generators, but also in countries in Southeast Asia and Africa where new infrastructure could be built.

“Natural gas is critical to achieve economic growth in these countries and also ensure a stable energy production,” said Izumi Kai, the chief executive in Asia of JERA, a Japanese energy company that is among the biggest players in the global LNG market.

Past and future

The LNG market goes back to 1969, when the U.S.  exported the first shipment from Alaska to Japan. But the foundation of the modern market was laid nearly 30 years later, when Qatar invested tens of billions of dollars to build the capacity to liquify and export its massive gas reserves. Its first shipment, also to Japan, set sail in 1996.

The U.S. supercharged LNG exports starting in 2016 on the back of a new drilling technique, fracking, that created a gas bonanza in Louisiana and Texas within striking distance of seaports. The subsequent flood of LNG shipments quickly made the U.S. the world’s top exporter. It also effectively globalized the LNG market, since buyers of U.S. shipments were allowed to resell them for a profit, even rerouting them at the last minute on the high seas.

Japan, especially, upped its purchases, looking for alternatives to nuclear power as it shuttered nearly all its nuclear reactors following the 2011 tsunami. Japanese investors, working closely with the government, bought stakes in LNG facilities in the U.S., Russia and Australia to secure supply as well as receiving facilities and gas infrastructure in other purchasing countries. That further globalized the market.

Now, Japan can buy more LNG than it might need, confident that other buyers are available to purchase any supplies the country doesn’t use. That’s made LNG critical to Japan’s energy security strategy — and also helped establish it as one of the most important commodities on the planet.

The growth hasn’t stopped. The LNG trade was supercharged following Russia’s invasion of Ukraine, as Europe has scrambled to replace Russian natural gas. U.S. exports are now expected to rise by 40% by 2030. Qatar plans to double shipments in that timeframe. Australia, Russia and Mozambique have started producing LNG. Asian countries are planning to raise their purchases.

The Biden administration paused some post-2030 U.S. production plans, arguing continued LNG exports could worsen global warming and raise U.S. gas prices. But the Trump administration has now approved those projects.

Even so, questions persist about LNG demand, particularly after 2030. New forms of energy, like next-generation nuclear and geothermal, are poised to take off in the 2030s and could ultimately undercut the market for LNG.

Meanwhile, Europe is rapidly adding renewable energy to decarbonize its energy system faster than any region in the world.

So all eyes are on Asia. The U.S., Japan and Qatar remain confident global LNG appetite will be sustained.

“The next growing market for LNG is Asia,” Kenneth Foo, a global LNG industry analyst with S&P Global. “The easiest solution, the most cost-effective solution, is still LNG.”

But world leaders might also consider Pakistan, a case study in how energy markets can be quickly upended by geopolitics. The country of 250 million people was suddenly priced out of LNG markets when Russia invaded Ukraine and LNG prices spiked. At the same time, Pakistan has seen a boom in solar power as prices for Chinese-made solar panels have plummeted.

The result: a dramatic drop in Pakistani gas demand that few predicted.