AUDIE CORNISH, HOST:
President Trump is in Louisiana today visiting the Cameron Parish liquefied natural gas export facility. He's promoting the American jobs created by the newly booming natural gas industry.
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PRESIDENT DONALD TRUMP: From right here in Hackberry, La., you will very soon be exporting clean, American natural gas all over the globe.
CORNISH: The timing was not the best for the president. The visit comes shortly after news that China would be raising tariffs on liquefied natural gas from the U.S. This is the latest in the ongoing trade war with China. NPR's Camila Domonoske is in the studio.
Welcome.
CAMILA DOMONOSKE, BYLINE: Hi.
CORNISH: So how does President Trump walk this line of promoting an industry at the same time his trade policies are working against it?
DOMONOSKE: Well, it's not exactly an unusual situation. There is a lot of U.S. industries that have felt the pinch from trade policies out of this White House at the same time that the president says those policies are designed to boost American companies. So, yeah, he's been a big supporter of natural gas exports, as was the Obama administration. And at the same time, the trade war with China has put those exports in the crossfire.
CORNISH: Can you talk about liquefied natural gas itself and why it's significant in this trade war?
DOMONOSKE: Sure. So natural gas is the stuff we use in our gas stoves, burn to heat our houses, can be used in power plants to make electricity. And it's extracted from the ground, much like oil in gas form. But if you supercool it, you can turn it into a liquid. Then it takes up a lot less space, which makes it easier to store or to ship around the world.
And it is still a fossil fuel. But it's relatively less polluting than coal. That's one reason why China is buying a lot of it, is really interested in it. It's also one reason why the Obama administration was previously promoting exports of liquefied natural gas.
CORNISH: At this point, how much is the U.S. exporting?
DOMONOSKE: Well, it's really interesting. The fracking revolution made the U.S. the world's biggest producer of natural gas. And as a result, we went from not exporting any liquefied natural gas to being the world's third-largest exporter. And it happened really fast. We weren't exporting at all until 2016. And there's more growth coming in the near future, like this facility that President Trump is at today.
CORNISH: Now we have this latest round of tariffs on the way. What does that mean for this market?
DOMONOSKE: Right. So tariffs are going up to 25%, but that won't actually change things in the short term as much as you might think because there was already a 10% tariff on liquid natural gas from the U.S. And as a result, we, basically, stopped sending this stuff to China. Charlie Riedl is the executive director of the Center for Liquefied Natural Gas. And he says American suppliers found other buyers.
CHARLIE RIEDL: A large amount of natural gas - LNG - going into Europe. We've seen it going to other markets like South Korea, Japan. So the gas is finding a home.
DOMONOSKE: Riedl would like to see the tariffs taken away completely. But in the meantime, he says raising them won't really make things much worse in the near term.
CORNISH: And what about the long term?
DOMONOSKE: The American Petroleum Institute says the tariffs could hurt investment in the U.S. industry. But I spoke to John Akridge, CEO of Height Capital Markets, which has actually worked on raising money for LNG companies. And he's more optimistic.
JOHN AKRIDGE: Going forward over the longer term, this will have zero effect on the market overall. If you think about it and you look at the math, even with a tariff, U.S. LNG is still competitive globally with the overall market.
DOMONOSKE: So the U.S. is the fastest growing exporter. China is the fastest growing importer of liquefied natural gas. He argues that tariff or no tariff, the gas will find a way to where it's wanted. Although, not everyone is so optimistic.
CORNISH: That's NPR's Camila Domonoske.
Thanks for your reporting.
DOMONOSKE: Yeah, thank you. Transcript provided by NPR, Copyright NPR.
