The U.S Government could do far worse than to look to Australia’s natural gas policy as it considers the future of LNG exports.
Gas production from the U.S. and Australia is essential to global energy markets. Australia was the world’s leading LNG exporter in 2020 and 2021, a mantle the U.S. assumed in 2023.
But the LNG industry in both countries has faced great policy uncertainty in recent times. In the U.S., this arrived with the unexpected January announcement of a halt to pending LNG export approvals, while Australia’s policy environment has been clouded for several years by cumbersome regulatory processes that stifled project development.
The Future Gas Strategy released by the Australian Government in May addresses many of these concerns and establishes a roadmap future gas production investment. It outlines a clear role for gas in Australia’s energy transition, ensuring reliable power generation as major renewable energy projects are rolled out.
Critically, it identifies the vital long-term contribution that Australian LNG will make in ensuring energy security for traditional customers in Asia and supporting emerging nations in the region as they look to reduce their reliance on high-emitting coal.
While the Future Gas Strategy is underpinned by International Energy Agency (IEA) projections for global gas demand, it notes great variations between differing scenarios and early indications that real-life demand may exceed modelling. It acknowledges forecasts for much higher gas demand in Asia from reputable sources that know the region best, such as the Institute of Energy Economics, Japan.
Thus far, flexibility around demand forecasts, including those of Asia, doesn’t seem to have had much of a place in dialogue around the U.S LNG export halt.