The U.S. Gas Boom Needs Ships. They Aren’t Being Built Fast Enough.

Workers at the Hanwha Philly Shipyard in Philadelphia, Pa. A related Korean company, Hanwha Shipping, has contracted to build a U.S.-flagged LNG carrier by 2028. (Hannah Beier/Bloomberg)

About the author: Leslie Palti-Guzman is the founder of Energy Vista, a strategic advisory firm. She hosts the Energy Vista podcast and is a nonresident fellow at the Center for International Studies and at New York University’s Center for Global Affairs.

The Trump administration started charging port and docking fees on Chinese vessels this month, prompting Beijing to retaliate with fees on U.S. ships and sanctions on U.S.-linked foreign ships. The liquid natural gas shipping sector is exempt for now from this tit-for-tat, but U.S. LNG players are on edge.

The worriers have a point. Within the next three years, U.S. LNG exporters will start facing new government restrictions on their use of foreign-built tankers—a key part of Washington’s plan to revive America’s shipbuilding industry—just as their export volumes are projected to surge.

As the U.S. has become the world’s largest oil and gas exporter, its shipping vulnerability has become glaring. Chinese shipyards have more than 50 active LNG carriers and another 50 scheduled for delivery in the next few years. Meanwhile, the U.S. has just one U.S.-flagged LNG vessel, American Energy, which serves Puerto Rico.

Washington wants to push U.S. companies to order U.S.-built tankers to curb Chinese maritime dominance. The Biden administration started this initiative, and the Trump administration has continued it. Everyone seems to agree the U.S. needs a strong, independent shipbuilding sector, especially in times of war or supply-chain disruptions.

The reality, however, is that the U.S. cannot achieve this alone—or within this decade. The bipartisan Ships for America Act, reintroduced in the Senate in April, would address parts of this issue. But Congress has yet to adopt it, and even if it did, there would be further challenges still.

Given the U.S. LNG industry’s rapid growth and limited domestic shipping capacity, LNG tankers need some short-term exemptions from new rules and the penalty fees that come if they don’t abide by them. LNG exporters are already lobbying hard for waivers or other flexibilities.

Another key issue is responsibility: Who must comply and who pays penalties? It will probably be the vessel owners and operators. For most U.S. LNG cargoes, the importer arranges shipping. Until now, exporters had no say over a vessel’s flag or ownership. That may have to change. It already is. The U.S.-based company Venture Global, which operates LNG export terminals on the Gulf Coast, recently contracted to construct or acquire nine LNG tankers that it will then own.

And then there is the administration’s “U.S.-built” criterion. How the administration decides to define that matters: Could a vessel co-built by a U.S.-owned company in an allied shipyard, using U.S. labor and transferred technology, qualify? The Korean shipbuilder Hanwha Ocean and its U.S. units, Hanwha Shipping and Hanwha Philly Shipyard, have proposed a roadmap for constructing U.S.-flagged LNG carriers. Does that count?

Scaling up production while transferring know-how across borders will take time and money. Building an LNG carrier costs about $250 million in South Korea, but a comparable vessel built in the U.S. today could be three to four times more expensive because of higher material and labor costs. That estimate remains theoretical—many of the needed specialized components aren’t even available in the U.S. yet.

Transnational technology licensing will also be critical. U.S. builders need access to specialized technologies, such as the LNG containment system developed by France’s GTT. GTT licensed that technology to a U.S. shipyard in September.

For this all to work, the U.S. maritime workforce needs to be re-educated. Shipbuilding is labor-intensive and depends on a skilled, technical workforce and supply chains. The U.S. lost this shipping knowledge decades ago. A 10-year training and technology-transfer program will be essential.

Skilled foreign workers will be needed to train U.S. crews and shipyard labor. Immigration policy must accommodate that. Over time, the share of U.S. labor should rise as training programs mature and domestic expertise expands, creating sustainable, high-skilled jobs across coastal states.

Yet contradictions in policy abound. The Trump administration needs Korea’s help to bring back shipbuilding, but its immigration enforcement officials recently detained Korean workers in a raid on a battery plant in Georgia. It says it wants domestic shipyards, but it placed tariffs on imported steel, inflating costs. It seeks skilled workers, but it tightened immigration and visa limits.

Reinventing the shipping ecosystem will require not just consistency, but coordination. Within the government, the U.S. trade representative’s office and commerce, state, defense, transportation, and energy departments must all work together. A multiagency maritime command center should oversee strategic planning, permitting, training, funding, subsidies, and coordination with allies, as was suggested in the Ships for America Act.

Beijing is increasingly becoming a rule-maker in global maritime standards, shaping norms that could disadvantage U.S. and allied shipping interests. Reasserting clout in international maritime institutions must be part of the U.S. shipbuilding and shipping revival strategy.

The U.S. shipbuilding renaissance, notably for commodity tankers, will require strategic patience and industrial partnerships with capable allies, but it is essential to America’s economic security, energy independence, and global influence.

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