How America Went From Importing Natural Gas to Shipping It Worldwide

Here is a business plan that would have gotten you laughed out of any boardroom in 2005: build a multibillion-dollar terminal on the Gulf Coast to receive foreign natural gas, and then, a few years later, rip out the plumbing, point it the other way, and sell American gas to the world. The experts of the time said America was running out of gas. The experts of the time were wrong, and the building has the receipts.

Folks, that is one of the great reversals in the history of American energy, and it happened so fast that most people missed it. This post explains how it works, why it came about, what the law says, and what it means for allies and for the family paying a heating bill.

Let me define the terms. Natural gas is a fuel made mostly of methane that comes out of the ground, often alongside oil. Liquefied natural gas, or LNG, is natural gas cooled until it becomes a liquid, which makes it far easier to ship. Liquefaction is the cooling process, and a regasification terminal is the reverse, warming the liquid back into gas. An export terminal is a facility that takes pipeline gas, liquefies it, and loads it onto ships.

How you ship a gas across an ocean

You cannot put a pipeline across the Atlantic, and natural gas as a gas takes up an enormous amount of space. So the industry does something clever. It chills the gas to roughly minus 260 degrees Fahrenheit, which is about minus 162 degrees Celsius. At that temperature the gas becomes a liquid that occupies about one six-hundredth of the volume it did as a gas. That is the number that makes the whole business work: a ship can carry the energy of an enormous volume of gas in a manageable tank.

The steps run like this:

1. Pipelines bring the gas from the wells to the terminal.
2. Pretreatment strips out water, carbon dioxide and other impurities that would freeze.
3. Liquefaction chills the gas in a process that uses a great deal of energy and large equipment, producing the liquid.
4. Storage and loading put the liquid into insulated tanks, then into specially built ships with insulated holds.
5. Shipping carries the cargo to a terminal abroad, where regasification warms it back to gas and sends it into a pipeline or power plant.

Every step costs money. Liquefaction is the most expensive, which is why export terminals are built only where the gas is cheap and plentiful and where long-term buyers will sign contracts to pay for them. That cheapness is the point of the story.

The shortage that wasn't

Go back to the early 2000s. Domestic natural gas production had flattened, prices had risen, and American utilities and industrial users worried that supply would run short. The industry's answer was to build import terminals, facilities along the coasts to receive LNG from places like Trinidad, Qatar and Algeria. Several were built or expanded in that decade, including at Sabine Pass on the Louisiana-Texas border, as insurance against a supply gap.

Then technology turned the world upside down. Producers, notably the Texas company led by George Mitchell, had spent years working out how to combine hydraulic fracturing, the pumping of fluid into rock at high pressure to open pathways for gas, with horizontal drilling, in which a well turns and runs sideways through a layer of rock. Applied to shale formations that had long been known to hold gas but could not be tapped economically, the combination opened enormous new supplies. Production surged, and a country that had expected to import gas for decades found itself awash in it.

That is the sort of thing central planners never see coming. Nobody in Washington decreed the shale revolution. Landowners, wildcatters, engineers and investors made it happen in places like Texas, Pennsylvania and North Dakota, because a property owner could own the minerals under his land and make money by developing them. That is an American peculiarity: in most of the world the government owns what is under the ground. Here the owner does, and so the owner has a reason to find out what is down there. A policy-minded person should notice how much of the story rests on a single feature of property law.

Turning the terminals around

By the late 2000s, with domestic gas abundant and cheap, the import terminals sat underused, and the economics were upside down. The same companies that had built them to bring gas in now asked the question the planners had never considered: why not send it out?

The first big answer was Sabine Pass in Louisiana, owned by Cheniere Energy. Work to add liquefaction began in the early 2010s. In February 2016, the facility loaded and shipped the first cargo of LNG from the lower 48 states, a milestone for the American energy industry. Alaska had exported LNG since the late 1960s from the Kenai peninsula, but this was the first from the contiguous states, and it opened the door. More terminals followed in Louisiana, Texas, Maryland and elsewhere, and American exports grew year after year. Within a few years the United States had gone from a net importer of natural gas to a leading exporter of LNG.

I will not give you current export volumes because they change with each year and each new plant, and I cannot hand you a figure I can source. You can check the latest from the Energy Department and the Energy Information Administration. What does not change is the direction: the country that built terminals to receive gas in the 2000s became one of the world's leading shippers of it within about a decade.

What the law says: Section 3 and the public interest

An American who wants to export gas does not simply load a ship. The Natural Gas Act of 1938 requires government authorization. Section 3 of the act provides that no person may export natural gas from the United States to a foreign country without first obtaining an order from the agency, which today is the Department of Energy, authorizing the export. The statute says the department shall issue the order unless, after opportunity for hearing, it finds that the proposed exportation "will not be consistent with the public interest."

Congress then added a refinement. For countries with which the United States has a free trade agreement that requires national treatment for trade in natural gas, exports are deemed to be consistent with the public interest and are approved automatically. For every other country, which we call non-free-trade-agreement countries, the department must conduct a public-interest review. The distinction matters because many of the largest customers, such as Japan and much of Europe, are not on the list of free-trade-agreement partners with that provision. The approval for a particular export terminal's sales to those countries therefore has to pass the public-interest test.

That is a real power over a major industry, resting on a broad standard. It is worth watching how it is used. In January 2024 the Biden administration paused the approval of new non-free-trade-agreement export authorizations while it reviewed the public-interest standard, a move that critics said froze projects and allies said was overdue. In 2025 the new administration ended the pause and resumed approvals. Whichever side you favor, the episode shows how much depends on a phrase in a 1938 statute, and why a conservative who believes in the separation of powers should want Congress, not a single agency's mood, to decide how broad "public interest" can be. That is the same principle as the argument in The Electric Car Mandate Is a Choice Washington Makes for Your Driveway: major questions belong to the people's representatives.

Europe after February 2022

The strategic argument for exports got its proof in 2022.

On February 24, 2022, Russia invaded Ukraine. Europe had come to rely on Russian pipeline gas for a large share of its supply, and Russia had spent years building the dependence into the continent's energy system. After the invasion, and as Russia cut deliveries and the flow of pipeline gas through the Nord Stream system shrank sharply, Europe scrambled for replacements. A great deal of that replacement came by ship, and in 2022 Europe took about two-thirds of American LNG exports.

Think about what that means. A country can hold an ally's heating system hostage when it controls the pipeline. It has much less leverage when the ally can buy from a dozen sellers by sea. American LNG gave European governments an alternative, and it gave American diplomacy something to offer besides speeches. This is energy as a tool of security, and the lesson applies beyond gas, as in the story of China Refines the Minerals Behind Every Battery, and America Let It Happen: whoever controls a supply chain can use it as a lever, and a free country should want many suppliers.

This is also where the climate argument often gets turned upside down. Burning natural gas to make electricity produces a little over half the carbon dioxide per unit of energy that burning coal does. When an American cargo of LNG displaces coal in a power plant abroad, or displaces Russian gas that was often delivered with significant leaks along its pipelines, the global effect can be a reduction in emissions. A move that helps allies, hurts a hostile regime and lowers emissions should be an easy sell. It is a measure of how politicized energy has become that people who say they care about all three have often opposed it.

The strongest objections, answered

Fairness requires the other side to be heard. There are two main critiques.

Domestic prices. The best case: Exporting gas links American prices to world prices. If foreign buyers will pay more, American producers will sell abroad, and the gas left at home becomes more expensive. Families who heat with gas and manufacturers who use it as a feedstock will pay more so that exporters can profit.

The answer, in order:

1. Exports are not free to move. Shipping LNG costs a lot, from liquefaction through the voyage and regasification. The price gap that makes exports profitable has to be large enough to cover all that, which limits how far it can pull American prices toward world levels.
2. Supply answers demand. The extra demand from exports has been met by more drilling, and the shale producers have responded to every price signal for fifteen years. Price spikes bring more supply, which is what a market is.
3. The facts of the period fit the market story. The years in which exports rose sharply were not years of runaway American gas bills. Residential prices respond to many things, including weather, pipelines and the cost of delivery. I leave the exact comparison to the Energy Information Administration's price series, which you can read yourself.
4. A tax on exporters is a tax on the people who found the gas. Blocking exports to protect domestic buyers is a transfer from producers to consumers, and the same logic would let a government ban the export of wheat to hold down bread prices. It is a policy with a long record of failure.

Methane. The best case: Natural gas is mostly methane, a potent greenhouse gas. Leaks along the chain from the well to the ship can wipe out the climate advantage over coal, and building export terminals locks in decades of fossil infrastructure.

The answer:

1. The concern is legitimate and measurable. Methane that escapes is lost product. Operators have a financial incentive to stop leaks, and the technology to detect and fix them has improved. Where the leak rate is high, the climate advantage shrinks, and honest analysis says so.
2. The comparison is to what the gas replaces. The relevant alternative to American LNG in much of Asia and Europe is coal or gas from suppliers with weaker controls, not a world of zero emissions. A tonne of coal burned in place of a tonne of American gas is a loss for the air.
3. "Lock-in" works in both directions. A country that cannot get reliable energy will build what it can, and that has often been coal. The case is made in Hundreds of Millions Still Cook Over Wood, and That Is a Moral Question: dependable power is the road out of poverty, and gas is a cleaner step along it.
4. The right response to leaks is enforcement of property and nuisance principles and sensible standards, not a ban on the product. If a producer is wasting gas, fix that.

What the Founders would say

Most of the Founders lived before anyone had heard of LNG, but they understood the principle. Article I, Section 8 gives Congress the power "To regulate Commerce with foreign Nations." The power over foreign commerce, including the sale of American goods abroad, is Congress's. The Natural Gas Act is an exercise of that power, delegated to an agency with a broad standard. A constitutionalist's instinct is to want the standard tight and the vote taken in the open, so that approvals do not swing with each change of administration.

And Washington's 1796 Farewell Address warned against "permanent, inveterate antipathies against particular nations, and passionate attachments for others." It is a good caution for energy policy. We ought to sell to allies for sound reasons of interest and shared values, and decline to build our policy around either sentiment or spite.

There is a related point about America's character. The country that built the Empire State Building in about a year, as We Raised the Empire State Building in About a Year, So Why Not a Power Line recounts, has no business taking a decade to permit a terminal or a pipeline. A restriction that delays building is, in effect, a restriction on the allies who wait for the cargo. You can read how a bill becomes a rule, and how many rules stand between a plan and a shovel, on the red tape page.

The case in brief

1. LNG works because chilling gas to about minus 260 degrees Fahrenheit shrinks it to roughly one six-hundredth of its volume, so ships can carry it across oceans.
2. America built import terminals in the 2000s expecting a shortage, and the shale revolution, made possible by hydraulic fracturing, horizontal drilling and private ownership of minerals, reversed the picture. Sabine Pass shipped the first cargo from the lower 48 states in 2016.
3. Section 3 of the Natural Gas Act of 1938 requires Energy Department authorization for exports, with automatic approval for free-trade-agreement countries and a public-interest test for the rest, so that Congress, not a passing mood, should set the standard.
4. After Russia invaded Ukraine in February 2022, American LNG gave Europe an alternative to Russian pipelines, and gas displaces coal and lowers emissions where it replaces it.
5. The critics' worries about domestic prices and methane are real questions with practical answers, not reasons for a ban.

What you can do: read Section 3 of the Natural Gas Act as codified at Section 717b of Title 15 of the U.S. Code, and ask your member of Congress whether the public-interest standard should be written more tightly.