For the past two decades, major exporters and traders of liquefied natural gas have pitched the fuel as a panacea for the world’s energy-hungry emerging economies.
Supercooled into liquid form for shipping, tens of billions of dollars of gas produced in the United States and Qatar each year could supply all corners of the globe. With both nations rapidly expanding their export capacity, energy experts anticipated the global market would be awash in cheap L.N.G. by 2030.
Governments across developing Asia, expected to be the center of global energy demand growth for the next half-century, based their long-term national energy strategies on this promise of abundant, free-flowing gas. L.N.G. presented the key to fueling expansion while transitioning away from more polluting coal, they believed.
But five months of war in the Middle East has shaken that belief.
The inability of ships to traverse the Strait of Hormuz has abruptly severed Asian buyers from Qatar, their primary L.N.G. supplier. Faced with a sudden supply shock, energy executives and policymakers across Asia are looking to pivot inward. They are turning to whatever domestic resources they can — from coal and gas to wind and solar — to help insulate themselves from future volatility. That need is only compounded by the expansion of the conflict to the Red Sea, another critical energy transit way.
The Middle East crisis “accelerated the interest in exploiting the resources in the Philippines,” said Guillaume Lucci, the chief executive of Prime Infra, a Manila-based energy infrastructure conglomerate. “The minute that you depend on imports by definition, you’re exposing yourself to market forces that are outside of the control of the importing nation.”
This “means trying to unshackle ourselves from markets that we don’t control,” he said.
Prime Infra operates a natural gas power plant complex in Batangas, a city roughly a two-hour drive south of Manila. The plants at the site have operated for more than two decades, drawing gas from the offshore Malampaya field, some 250 miles southwest.
The Batangas site is carved out of a coastline of mangroves and dark-sand beaches lined with tropical almond trees and sunbathing monitor lizards. Transmission lines vein out from the facility, stretching inland toward Mount Makiling, a hazy green saddle-shaped peak in the distance.
In 2023, when executives believed the Malampaya field was on the verge of depletion, they built an offshore L.N.G. terminal. Now, however, Prime Infra’s leadership is looking closer to home.
A subsidiary of the company started drilling more natural gas wells in the Malampaya field, extending its life span by at least six years, Mr. Lucci said. “Unfortunately, in the Philippines, there were very few wells drilled in the past decade and a half,” he added. “Hopefully that’s going to start to accelerate.”
Meanwhile, some 120 miles north of Batangas, the country’s largest solar project began delivering its first megawatts of power in March. That came two weeks after the outbreak of the Iran War, which pushed up energy prices and knocked out 20 percent of the global L.N.G. supply.
“That was fortunate timing. It was like fate,” said Emmanuel Rubio, the chief executive of Meralco PowerGen, the utility-backed power generation company that operates and invests in Terra Solar and gas- and coal-fired power plants in the Philippines.
For a country that imports nearly all of its fossil fuels, the solar project has proved that “we can actually be, to a certain extent, self-reliant,” he added.
The crisis in the Middle East has brought the risks of import dependency into sharp focus, Mr. Rubio said. L.N.G. was championed as a stable option for electricity production, unaffected by fluctuations in sunlight or wind. “But with the volatility of L.N.G., we’re rethinking that,” he said.
In March, the month after the start of the war, Philippine L.N.G. imports fell by a quarter compared with the previous year, according to Kpler, a maritime data firm. Shipments have since recovered slightly, but countries across Asia continue to pay roughly double what they did before the war.
In 2020, the Philippines declared a moratorium on new coal plants to accelerate its shift toward cleaner energy. But the goal is to ensure “a stable energy source, a reliable energy source and one that is cost effective for Filipinos,” Mr. Rubio said, even if it means extending the life of coal.
A similar recalculation is playing out across the rest of developing Asia.
In recent months, countries across the region have ramped up generation at coal-fired power plants. Governments have fast-tracked renewable energy projects and are reporting an uptick in sales of home solar-power systems and electric vehicles. Countries including Indonesia, the Philippines and Vietnam are also exploring or beginning work on their first commercial nuclear power plants.
The Vietnamese conglomerate Vingroup shelved plans for a multibillion-dollar L.N.G. import terminal in March. The company has since said it would use the site for a manufacturing hub powered by renewable energy.
Before the war, global markets had been anticipating an “unprecedented” wave of L.N.G. supply, said Keisuke Sadamori, a former director at the International Energy Agency.
L.N.G. supply was throttled once already following Russia’s invasion of Ukraine in 2022 and demand for natural gas soared as Europe turned to other sources. With this latest supply disruption, there is more doubt “on whether Southeast Asian countries will actually decide to invest additional money in L.N.G. import infrastructure,” he said.
Many developing Asian nations are taking notes from China, which has tried to insulate itself from dependence on energy imports. It has leaned heavily on its coal reserves, while scaling up domestic renewable production, electrification and nuclear power. It is also supplying much of the renewable energy infrastructure to the rest of Asia.
“We’re seeing the bifurcation of global energy systems. You have the U.S. and Japan on one side sticking to fossil fuel legacy, and the renewables case led by China that is growing at a rapid rate,” said Sam Reynolds, the research lead for L.N.G. and gas in Asia at the Institute for Energy Economics and Financial Analysis.
“New supply banks on the existence of markets like China, India and emerging Asia,” he said. A pullback in Asian demand could leave suppliers building capacity in the United States and elsewhere with fewer buyers than they expected, he said.
Still, some energy experts and industry officials believe the appetite for L.N.G. infrastructure investments will return to prewar forecasts once global supply rebounds.
The energy giant Shell in June projected that global demand for L.N.G. would climb 65 percent by 2050, and South and Southeast Asia would serve as the primary engines of growth.
Edward McCartin, the chief executive of Energy World Corporation, which develops L.N.G. and power generation projects across Asia, is optimistic about the long-term prospects. L.N.G. can balance intermittent renewable sources like solar and help the region transition from coal, he said.
“Solar, hydro, geothermal, natural gas and coal — we need all of it,” he said.
For now, policymakers at the Philippine Department of Energy are closely monitoring the conflict in the Persian Gulf. Michael Sinocruz, director of the Energy Policy and Planning Bureau, said the government was considering revising its national energy plan to potentially reflect a different mix of energy sources for the coming decades.
“What we are looking at is how much gas we need,” he said. “We cannot rely on renewables alone.” But the energy crisis “has awakened developing Asia to the importance of energy independence.”
