President Donald Trump met with Indian Prime Narendra Modi Tuesday to discuss energy trade between the two countries, with a particular focus on increasing U.S. natural gas exports to fuel India’s developing economy.
“I agree that the U.S. is close to becoming a net exporter of energy and that a key element in this is natural gas,” Richard Kauzlarich, former U.S. ambassador to Azerbaijan, told The Daily Caller News Foundation.
The Trump administration plans on “U.S. energy dominance” by making the country a net exporter of energy, selling more oil and liquefied natural gas (LNG) abroad than it imports. The biggest barrier to Trump’s plan is the relatively limited infrastructure available to liquefy and ship natural gas, Kauzlarich said.
“A critical element in this picture is whether the U.S. will have the necessary infrastructure — pipelines, pumping and storage facilities, LNG terminals — to support LNG exports in the volumes to make the U.S. a net exporter,” said Kauzlarich, who now teaches energy geopolitics at George Mason University
Demand for natural gas is on the rise in India, adding to the growing demand for gas worldwide. U.S. companies are scrambling to build the facilities necessary for exporting LNG.
A recent analysis of India by the U.S. Energy Information Administration (EIA) found the country is becoming “increasingly dependent on energy imports,” which America could supply.
“Rather than debate when or if the U.S. becomes a net exporter, it is more important to look at particular markets such as India,” Kauzlarich said.
“India is the third-largest consumer of energy in the world,” he said, adding that “natural gas is increasingly a substitute for coal in electrical power generation as well as an input to India’s fertilizer industry. In 2015, India became the fourth-largest LNG importer.”
India currently imports much of its energy from Middle Eastern nations, including Saudi Arabia, Iran, Iraq and Qatar. These countries are relatively unstable, which could give American LNG a comparative advantage.
U.S. natural gas may not be as competitive in India compared to imports from Middle Eastern countries, but other nations will still clamor for American shale gas. As shale producers become more efficient and more terminals become operational, U.S. gas could supplant Middle East gas in India.
“My bottom line: the potential exists for the U.S. to export LNG to the Indian market and even become a net energy exporter,” Kauzlarich said. “At the end of the day, however, market forces and availability of the necessary infrastructure for export will determine this. Not political statements and hopes.”
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