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New Atlanticist January 14, 2025

East Asia’s energy security challenges can be mitigated by US LNG

By Landon Derentz, Joseph Webster, and Reid I'Anson

East Asia’s scarce energy resources, coupled with the vast distances that separate the United States and its Indo-Pacific partners and allies, will be a consequential—and possibly decisive—element in any major confrontation between a United States-led coalition and the People’s Republic of China (PRC).  

US allies and partners in East Asia share a similar energy security challenge: heavy reliance on maritime energy imports that could be interdicted or blocked by the Chinese navy. In recent years, the PRC’s “Malacca Dilemma”—its vulnerability due to Beijing’s dependence on energy shipments through the Strait of Malacca—has been the subject of significant attention. However, Taiwan, Japan, and South Korea are even more dependent on seaborne shipments, and their vulnerabilities have received less attention from policymakers. Indeed, the Chinese navy recently conducted exercises near Japan’s southwest islands in the Miyako Strait, suggesting that the PRC might attempt to impose a naval blockade in the event of hostilities. Moreover, the PRC continues to reduce its exposure to global energy markets by boosting its domestic output of renewable energy, subsidizing the uptake of electric vehicles, and, incongruously, expanding its indigenous coal energy capacity. Japan, South Korea, and Taiwan, on the other hand, lack mainland China’s comparative resource abundance and, accordingly, face more difficult energy security challenges. 

To enhance the energy security of these US allies and partners in the Indo-Pacific, policymakers must grapple with artificially suppressed energy prices and the need to avail the region of more liquefied natural gas (LNG) shipped from the United States. 

Gradually increasing indigenous energy prices (which are often heavily subsidized) across East Asia would lower overall demand, incentivize regional supply sources, and significantly strengthen the region’s energy resiliency. Unfortunately, this policy is unlikely to produce results in a rapid timeframe, and it puts considerable upward pressure on inflation, a net negative for economic growth as central banks are then forced to tighten monetary policy in response. Regional policymakers will need to balance short-term political economy considerations with long-term energy security risks.

There’s a simpler and more effective way to strengthen Indo-Pacific energy security in the near term, however. Purchasing more US LNG would enhance East Asia’s energy security by reinforcing ties between the region’s democracies and the United States. Crucially, deepening transpacific LNG ties would likely reduce the probability of Chinese aggression, underscore the region’s importance to various US constituencies, decrease global emissions, and improve urban air quality across the region. Strategically, by linking their energy security to the nation with the world’s strongest military, East Asian democracies can also enhance deterrence vis-à-vis Beijing. 

Surveying East Asia’s energy security

East Asia’s energy security landscape reveals significant challenges for US allies and partners. The PRC is the most energy-secure economy in the region, by far, while the democracies’ challenges are stark on a comparative and absolute basis. Taiwan, Japan, and South Korea are almost entirely dependent on seaborne hydrocarbons, while the PRC is much less reliant on imports, especially seaborne imports.

Even though the PRC is the most energy-secure economy in the region, it is still taking huge strides to minimize its current reliance on foreign energy imports. Beijing is deploying massive amounts of solar energy, onshore and offshore wind, and nuclear energy. China has also aggressively sought to increase domestic LNG- and electric-powered vehicle fleets. While mainland China’s mass deployment of clean energy technologies will reduce overall pollution and carbon dioxide emissions, all things being equal, these effects are somewhat reduced by Beijing continuing to ramp up its coal power capacity. The clearer benefit that these measures provide to the PRC is to decrease its reliance on energy imports.  

Taiwan, Japan, and South Korea, conversely, remain almost totally dependent on maritime imports for crude oil, natural gas, and coal. Taiwan’s coal dependency is especially striking and worrisome: It is the world’s largest per-capita consumer of coal for the electricity sector, a peculiar state of affairs given the risk of a potential energy quarantine or blockade by PRC forces.

In the event of a confrontation or conflict with the PRC, the People’s Liberation Army Navy might attempt to prevent energy supplies from reaching not only Taiwan, but also US allies South Korea and Japan. At a minimum, an implicit blockade would impose profound disruptions on these economies. In a worst-case scenario, it would potentially force US allies and partners to capitulate to the PRC’s will.

Sustaining East Asian democracies’ energy security will prove difficult and they cannot eliminate their need for maritime energy imports. Still, the Unites States and its regional allies and partners should take appropriate action to manage these risks.

Safeguarding East Asia’s energy security by constraining demand

East Asian democracies’ energy security is constrained by the region’s economics, politics, geography, and even geology. None of the East Asian democracies have abundant indigenous energy potential—for either renewables or hydrocarbons—that can completely satisfy demand, at least not with today’s technology. Given their inability to substitute imports with indigenous energy production in the foreseeable future, Taiwan, Japan, and South Korea must reduce overall demand. Gradual, frequent, and steady increases in electricity and energy prices can help mitigate energy security vulnerabilities in the East Asian democracies.

Higher energy prices would enhance each economy’s energy security by incentivizing firms and households to limit demand and improve energy efficiency. Additionally, higher electricity prices would improve the economics of indigenous electricity generation sources—chiefly for nuclear energy—but also for other energy sources, including offshore and onshore wind, as well as solar. Notably, greater adoption of these resources would lower the region’s overall carbon footprint and reduce pollution, especially in urban areas. 

Nonetheless, higher prices would undeniably introduce challenges. Higher energy prices could divert manufacturing production to places with lower costs, as manufacturers might re-site production to other economies with less expensive electricity or fuel costs. Moreover, higher energy prices across East Asia would impose pain on the region’s energy-intensive industries and on consumers directly, potentially sparking a political backlash

Raising energy prices would undoubtedly pose domestic political risks across East Asia. But the status quo—energy insecurity and dependency on seaborne imports at risk of interdiction—could create severe risks for the region’s democracies, especially Taiwan. The region can balance its security and developmental needs, especially over the near and medium terms, by turning to US LNG.

How US LNG can help

There would be considerable substantive and political benefits to East Asian democracies importing more US LNG. Their reliance on emissions-intensive coal could be mitigated by natural gas, which has a lower overall carbon footprint. Importantly, the gap between coal and natural gas emissions intensity may grow if the US natural gas complex is able to seize carbon reduction technologies, such as carbon capture and storage and methane abatement.

Besides lowering emissions, US LNG would enhance these economies’ security in two ways. First, owing to the realities of the United States’ comprehensive national power, the PRC is less likely to interdict vessels carrying US LNG than it would, say, shipments of Indonesian coal. Tying their energy security to the United States would also significantly bolster East Asian democracies’ deterrence against potential PRC aggression. Additionally, greater commercial ties with US companies can help to reinforce US commitments to the East Asian democracies, especially since bilateral trade deficits are likely to become much more politically sensitive in the years to come. 

An increase in the amount of US LNG that East Asian democracies purchase over the next half decade is made possible by a rapidly accelerating buildout in US export capacity. By the end of 2025, monthly US LNG export capacity is poised to finish at 9.4 million metric tons (Mt), up from 8.2 Mt/month in December 2024, largely driven by the startup of the Plaquemines facility near New Orleans, Louisiana. In addition, per Kpler analysis, up to 125 Mt per year of new export project approvals looks possible under the Trump administration, which would provide a steady stream of fresh LNG exports through the end of the decade.

Asian democracies also have plenty of space to replace existing imports with more US LNG. Across Japan, South Korea, and Taiwan, of the 136 Mt that was imported through 2024, just 14 Mt was sourced from the United States (11 percent of the total). More US volume could help to replace LNG arrivals from the likes of Qatar (17.4 Mt), Russia (7.9 Mt), Indonesia (7.4 Mt), and Malaysia (17.9 Mt), among others. Additionally, the wealthy Asian democracies, especially Japan and South Korea, could facilitate coal-to-LNG switching across the region. The Philippines should also be a strategic priority, as the country is now home to four new US military sites, is a target of attempted Chinese coercion, and is suffering from an energy crisis. East Asian democracies, working with US, Australian, and Qatari LNG exporters, could ensure that key southeast Asian nations are able to achieve energy security and urban air quality benefits from LNG. 

With a potential quarantine or blockade of Taiwan looming larger every year, it is essential for the East Asian democracies to mitigate their energy security vulnerabilities. This process will not happen overnight, nor will it be easy. It’s important to get started as soon as possible with both efforts: Taiwan, South Korea, and Japan should strengthen themselves by incentivizing indigenous energy production, and they should also import more US LNG to bolster their strategic relationships with the United States.


Landon Derentz is senior director and Morningstar chair for global energy security at the Atlantic Council Global Energy Center. 

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. 

Reid I’Anson is a macroeconomist at Kpler. This article reflects their own personal opinions.

Further reading

Related Experts: Landon Derentz and Joseph Webster

Image: A liquefied natural gas (LNG) tanker is tugged towards a thermal power station in Futtsu, east of Tokyo, Japan November 13, 2017. REUTERS/Issei Kato