Let Markets Help Steer America’s Energy Diplomacy

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September 16, 2025

Recent headlines about potential Japanese investment in Alaska’s LNG development have sparked important conversations about America’s energy future, but the cautious responses from Japan reveal something equally significant: that market realities and the politics of who gets what from whom in business and diplomacy are inseparable.

The measured reactions from Japanese industry leaders—ranging from “we need to assess specific conditions” to outright skepticism about project economics—underscore a fundamental truth that has for many decades exemplified the best of American business and diplomacy.

When businesses evaluate investments – especially involving something as critical and valuable as energy – they focus on long-term commercial viability, resource quality, and regulatory certainty. Buyers, be they commercial or government entities as we are seeing the case of the Alaska LNG discussion, equally are concerned with those factors. This is where diplomacy and business meet – governments on both sides facilitate deals that serve both commercial and national interests.

This is why government announcements, however well-intentioned, generally cannot substitute for sound project economics and competitive advantages.

This reality is driving behind-the-scenes discussions among leaders in western states who recognize that Asia’s enormous energy appetite creates space for multiple North American export options. Rather than viewing potential projects as competing for a fixed pie, these leaders understand that Asian LNG demand—expected to drive roughly 70% of global growth through 2040—can support diverse supply sources that each bring unique advantages.

What’s particularly encouraging about these conversations is their focus on leveraging regional strengths rather than seeking federal favoritism. The Rocky Mountain region offers compelling natural advantages that smart policy can help unlock: abundant proven reserves, stringent environmental standards that produce some of the world’s cleanest natural gas, and a strategic geographic position.

Shipping Rockies gas from North America’s West Coast to Asian markets requires roughly half the transit time of comparable Gulf Coast routes, reducing both transportation costs and avoiding the Panama Canal, viewed in Asia as both a political and supply chain risk.

Consider the San Juan Basin. This region has not only weathered years of challenging gas prices but has emerged with proven staying power, technical expertise, and significant economically developable reserves. Early indicators suggest substantial new recoverable resources in the Mancos formation, adding to an already robust resource base. Most importantly, operators here have consistently demonstrated their ability to produce gas under New Mexico’s industry-leading methane regulations—standards that create genuine environmental advantages in global markets. The story is much the same in the Rockies basins in Utah, Wyoming, Colorado and tribal nations in the region.

A WSTN study demonstrates that natural gas exported from the American West to Asian markets can reduce net lifecycle emissions by 42-55% when displacing higher-emitting fuels used for power generation. These aren’t marginal improvements—they represent substantial environmental progress that is literally exportable.

These factors create real competitive advantages for Western producers when international buyers evaluate long-term supply contracts.

This is where federal policy can make the greatest impact: not by endorsing specific projects, but by creating regulatory frameworks that allow diverse American energy resources to compete internationally on their inherent merits. When businesses can evaluate projects based on resource quality, production costs, environmental performance, and market access, American energy strengthens its global position through genuine competitive advantages delivered in the spirit of partnership with our allies.

The strategic implications extend beyond commerce. U.S. LNG exports have evolved into what we call a “middle power”—an instrument of international influence that sits between the soft power of our democratic ideals and the hard power of our military capabilities. This middle power works most effectively when the genuine market needs of our allies and trading partners wish to pull it toward them, rather than having it pushed at them.

Japanese companies’ cautious responses to the headlines about the Alaska LNG project illustrate this well. Their comments are either non-committal or focus on project economics, risk assessment, and commercial viability. Those concerns can be met while ensuring benefits accrue to the U.S. and her companies while meeting the commercial and national interests of allies like Japan, one of our strongest global partners.

All we need to do is to put the most options on the table that meet the requirements. This has been one of America’s greatest assets as it became the world’s superpower, and contrasts well with the more coercive energy approaches of Russia, Iran or China.

It is a look that’s never really gone out fashion on the global stage. As our energy approach surges into a new era, it is still ready for its close-up. 

Andrew Browning is President, Western States and Tribal Nations Energy Initiative. 

This article was originally published by RealClearEnergy and made available via RealClearWire.