On his first day back in office, President Donald Trump issued a flurry of executive orders, signaling a dramatic shift in U.S. energy policy. Among the most significant was an order ending former president Biden’s moratorium on new liquefied natural gas (“LNG”) export permits. This move underscores Trump's commitment to bolstering America’s energy dominance, reversing the Biden-era environmental policies, and prioritizing economic growth over regulatory constraints.
Major U.S. LNG exporters like Cheniere Energy LNG, Shell SHEL and Chevron CVX stand to gain significantly from this policy change. These companies are well-positioned to capitalize on growing global demand, particularly in Asia, where nations like Japan and South Korea depend heavily on U.S. LNG for energy security. The immediate resumption of export permit reviews provides U.S. exporters with a critical edge in meeting the rising demand.
Moreover, projects like Lake Charles and Commonwealth LNG, both impacted by the Biden administration's pause on new permits, now stand to gain renewed momentum. Trump's decision to lift the halt should expedite their progress significantly.
Economic and Strategic Implications
Another priority for the Trump administration is the Alaska LNG project, a $44 billion initiative involving an 800-mile pipeline. The initiative epitomizes Trump’s vision of unleashing America’s resource potential. The project, which was authorized during Trump’s previous term and reauthorized under Biden, now regains enthusiasm. It promises to generate $10 billion annually in trade benefits, create thousands of jobs, and help reduce global carbon emissions by up to 2.3 billion tons over its 30-year lifespan.
The lifting of the LNG permit pause also boosts projects with advanced progress, potentially adding nearly 100 million metric tons per annum (“MTPA”) of export capacity by 2031. Notable beneficiaries include Venture Global’s Plaquemines and CP2 projects in Louisiana, Sempra’s Port Arthur expansion in Texas, and Glenfarne Group’s Magnolia LNG.
Additionally, Energy Transfer ET, facing challenges with its 15.5 MTPA Lake Charles project, expressed optimism about obtaining the necessary regulatory approvals under the Trump administration. Commonwealth LNG, after enduring prolonged delays under Biden’s administration, now plans to proceed with its 9.5 MTPA export facility in Louisiana.
This decision also carries geopolitical weight. By ensuring a steady supply of LNG to allies in Asia and Europe, the United States strengthens its position as a reliable energy partner, reducing these regions' dependence on Russian gas amid the ongoing geopolitical tensions.
Environmental Concerns and Economic Trade-offs
While industry leaders hailed the decision, environmental groups raised alarms about its potential consequences. A study commissioned by Biden’s administration found that unfettered LNG exports could increase U.S. natural gas prices by 31% by 2050, adding over $100 annually to household energy bills. Moreover, critics argue that the focus on ramping up fossil fuel exports contradicts global climate goals, flaring up emissions and delaying the transition to cleaner energy sources.
Organizations like Friends of the Earth and Earthjustice warned that accelerating LNG development could lead to habitat destruction, harm subsistence communities and escalate the climate crisis. Despite these concerns, industry groups argue that enhanced LNG production aligns with energy security and economic imperatives, especially in regions where alternative energy solutions are less viable.
Investment Outlook
Trump’s pro-LNG stance has reinvigorated optimism among investors in the Energy sector. For LNG exporters like Cheniere Energy, Shell and Chevron, the removal of regulatory bottlenecks offers a pathway to unlock significant revenue streams.
Cheniere Energy: Being the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, Cheniere Energy certainly enjoys a distinct competitive advantage. The Zacks Rank #2 (Buy) company is primed for significant revenue and earnings growth on the back of solid operations and long-term contracts. Cheniere Energy’s Corpus Christi Stage 3 expansion is also progressing well, with construction 68% complete and Train 1 scheduled for initial gas introduction by the year-end. The company’s gas supply deals for its Sabine Pass and Corpus Christi projects offer excellent cash flow visibility in the coming years.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Shell: Shell’s long-term strategy revolves around LNG. This London-based firm bought BG Group for $50 billion in 2016 to become the world’s largest producer and shipper of LNG. With LNG export demand likely to rise significantly in the near-to-medium term, Shell’s position as a major supplier of LNG should help it meet the fuel’s growing demand and improve cash flow. Shell’s exposure to this transitional fuel also offers a stable growth avenue within its diversified portfolio.
Chevron: Chevron is another world-class operator of LNG. The giant Gorgon and Wheatstone developments in Australia are part of Chevron’s long-term strategy and are its flagship LNG developments. These mega projects allow the supermajor to tap the strong Asian LNG demand. Combined, these projects have an annual LNG production capacity exceeding 24 million metric tons. Chevron is the operator of both projects — with a stake of 64.14% in Wheatstone and 47.3% in the Gorgon development.
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