Liquefied Natural Gas: Redefining Nature, Restructuring Geopolitics, Returning to the Periphery?

• Date: 01 January 2020
• DOI: http://doi.org/10.1111/ajes.12313
• Published date: 01 January 2020
• Author: Paul S. Ciccantell

Liquefied Natural Gas:

Redefining Nature, Restructuring

Geopolitics, Returning to the Periphery?

By Paul S. CiCCantell*

abStraCt. The liquefied natural gas (LNG) industry began as a means

of making use of natural gas resources in socially remote regions and

of natural gas associated with oil production. Natural gas was

transformed from a waste product into LNG that could be moved

thousands of miles to market, redefining “waste” as a valuable raw

material. As the newest large-scale LNG exporter, the United States

entered the LNG industry based on another redefinition of nature: the

extraction of natural gas previously economically and technologically

inaccessible in shale formations. Hydraulic fracturing and new drilling

technologies have created reserves of natural gas that are driving

down prices with excess production and provoking a search for new

markets via LNG exports. Liquefied natural gas is reshaping economies,

communities, industries, and ecosystems in the United States and in

other parts of the world.

This article analyzes the role of the LNG industry with a particular

focus on the economic and geopolitical consequences for the United

States. The United States is returning to its historical role of energy

exporter. Some view the return to this role as an economic and geo-

political boon that will enhance the U.S. economy and the nation’s

global standing. A contrasting interpretation sees the United States

sliding into the extractive periphery, serving the energy demands of

a growing China, much like the United States once did for Europe

and especially Great Britain. This view condemns what it views as the

exploitation of U.S. natural resources to meet China’s energy needs

while leaving large areas of the United States with depleted resources,

damaged ecosystems, and disrupted communities.

American Journal of Economics and Sociology, Vol. 79, No. 1 (January, 2020).

DOI: 10.1111/ajes.12313

© 2020 American Journal of Economics and Sociology, Inc.

*Professor of sociology at Western Michigan University. Research and teaching inter-

ests: socioeconomic and environmental consequences of NAFTA; economic develop-

ment in Latin America. PhD in sociology, University of Wisconsin.

Email: Paul.ciccantell@wmich.edu

266 The American Journal of Economics and Sociology

Introduction: A New Raw Material

The liquefied natural gas (LNG) industry began as a means to make

use of natural gas resources in socially remote regions and of natural

gas associated with oil production that was being flared or reinjected

into the earth. In a fundamental sense, natural gas was transformed

from a waste product of little human use into LNG—a product that

could be moved thousands of miles to market. As such, LNG was

redefined from merely a wasteful byproduct of oil production into

a valuable raw material. As the newest large-scale LNG exporter, the

United States entered the industry based on another redefinition of

nature: the extraction of natural gas previously economically and

technologically inaccessible in shale formations. Hydraulic fracturing,

also known as “fracking,” and new drilling technologies transformed

shale into immense reserves of natural gas and oil that drove down

prices with excess production and generated a search for new mar-

kets around the world via LNG processing. In short, the global LNG

industry and particularly its emerging U.S. component are based on

redefining nature via technology and investment in LNG and fracking.

Liquefied natural gas is reshaping economies, communities, industries,

and ecosystems in the United States and in other parts of the world.

This article analyzes the role of the LNG industry in the first de-

cades of the 21st century in the reshaping of nature and of the world

economy, with a particular focus on the consequences for the United

States. The natural, technological, economic, and political dimensions

of the rapidly growing LNG industry are the subjects of a growing

body of literature (Grigas 2017; Tusiani and Shearer 2007; Pierce et al.

2018; Nikhalat-Jahromi et al. 2017; Sakmar 2018). Some consequences

of the LNG industry are becoming apparent, including the movement

toward the creation of a global natural gas market, the role of LNG

exports from the United States in challenging Russian dominance over

and geopolitical use of natural gas as a weapon, and how fracked

natural gas reduces U.S. energy costs for industry and consumers, sup-

porting U.S. economic growth and the reshoring of some industries

(Grigas 2017; Smil 2015; Rao 2012; Kleinhenz and Associates 2019).

In the political realm, natural gas exports in the form of LNG have

recently taken on a new economic and geopolitical identity as what

267Liquefied Natural Gas

the Trump Administration labels “freedom gas” and “molecules of U.S.

freedom to be exported to the world” (Hall 2019b; Mufson 2019).

According to Energy Secretary Rick Perry: “The United States is not

just exporting energy; we’re exporting freedom” (Mufson 2019). This

view of the nation’s role in the LNG industry represents a key dimen-

sion of the “America First” policy of the Trump Administration. This

policy orientation guides U.S. efforts to delink from, or at least restruc-

ture, key elements of America’s role in the world economy and geo-

politics, including a reduced dependence on traditional alliances and

removal from certain global commodity chains (GCCs), most notably

the Middle-East-based, oil-industry commodity chain (Sowers et al.

2014, 2017). This effort by the United States is only possible because

of the restructuring of the oil and gas GCCs, wherein the United States

recaptures its role as the world’s leading producer and potential ex-

porter of these critical commodities. In reclaiming this role, the United

States is creating a situation that the Trump Administration describes

as energy dominance, a framing that “invites those who feel aggrieved

under Obama administration regulatory policy and the multicultural

identity politics of the left to renew their commitment to fossil fuels,

American exceptionalism, and a restored social order and privilege”

(Schneider and Peeples 2018: 1). U.S. government policy also seeks

to promote domestic extraction of a wide range of minerals in order

to reduce import dependence and vulnerability to foreign competi-

tors such as Russia and China (Reuters 2018; Eilperin 2017; Mamula

and Bridges 2018; U.S. Department of Commerce 2018). Without

energy independence and growing leverage in global markets for these

commodities, the United States would have remained vulnerable to

the resource nationalist policies pursued in the oil-and gas-producing

nations of Iraq, Libya, Yemen, and other parts of the Middle East.

Under Trump’s energy dominance plan, LNG can even be used as a

geopolitical weapon by the United States against Russian efforts to

reshape economic and political relations in Europe, the Middle East,

and Asia (Grigas 2017).

The United States is clearly returning to its historical role of energy

exporter, as it was in the early decades of the oil industry (Yergin

1991). Grigas (2017) interprets this history as a key to U.S. economic

ascent and sees this return to energy exports as an unquestionably