After nearly a year, the Department of Energy released its long-awaited study into whether sending more American natural gas overseas is in the public’s interest.
Based on the findings, top federal energy officials say the answer is no.
“The main takeaway is that a business-as-usual approach is neither sustainable nor advisable,” said U.S. Energy Sec. Jennifer Granholm during a press call on Tuesday.
The U.S. is the world’s largest producer and exporter of natural gas, and within the past five years, gas exports have tripled. By 2030, it will double again with the completion of new gas export plants currently under construction.
Companies build massive facilities to supercool the gas near liquid form, turning it into liquified natural gas, or LNG before it’s shipped overseas. The study found that, in most scenarios, the U.S. already exports more than enough LNG to meet global demand. In fact, gas demand in many countries has already peaked and started to decline.
President-elect Donald Trump has promised to start approving the construction of even more LNG export plants as soon as he enters office.
The new administration’s plans to unleash American gas without restrictions would significantly hurt the economy here at home and expose U.S. residents to the volatility of the global gas market, the study shows. Natural gas prices could skyrocket by more than 30%. The average American household could see its energy bill rise by over $100 by 2050.
The increase in natural gas and electricity prices would also hit the manufacturing industry, potentially causing the price of consumer goods to go up. Manufacturing trade groups agreed with the study, noting that their costs would increase by $125 billion by 2050, leading to inflation.
Industrial Energy Consumers of America President Paul N. Cicio said the lack of limits on how much LNG can be exported means “consumers are completely exposed.”
On top of the economic risks, the continued expansion of the LNG industry will likely have huge consequences when it comes to climate and the environment overall.
Granholm warned the next administration to think twice before approving enormous LNG plants like one proposed in southwest Louisiana. Proposed by LNG giant Venture Global, the CP2 export facility would be the largest in the world, capable of exporting nearly 4 billion cubic feet of natural gas per day. The U.S. can currently export about 14 billion cubic feet per day. According to the study, a project the size of CP2 would emit more greenhouse gas annually most of the world’s countries did in 2023.
LNG plants themselves are often located in communities already overburdened by industrial pollution. Most of the proposed projects would be located in Texas and Louisiana.
Two Louisiana LNG projects — CP2 and Commonwealth LNG in Cameron Parish – recently hit a permitting delay. The Federal Energy Regulatory Commission required the developer to conduct a lengthy environmental impact review after the agency found a pollution analysis insufficient.
Environmental and community advocates who oppose the flood of LNG plants weren’t surprised by the findings. Roishetta Ozane lives in southwest Louisiana, where several plants are proposed. She said the report confirmed what people in frontline communities “have been saying forever.”
“We need a transition to renewable energy that prioritizes our health and well-being of our families, our communities, and this climate,” she said. “It's time for the federal government to listen to our voices, recognize the real impacts of these proposed terminals, and stop allowing these permits to be approved.”
Though the federal study didn’t call for a complete ban on new LNG plants, Ozane and other advocates will be able to use the information to challenge approvals under the Trump administration.
Under the Natural Gas Act, the federal government is required to put the interest of the American public first, said Gillian Giannetti, senior attorney at the Natural Resources Defense Council.
“The analysis clearly shows continuing to issue authorization after authorization, discounting the natural gas act is flatly inconsistent with law,” she said.
Even if the Trump administration’s LNG-friendly policies remain in place, the market might sound the death knell for the fossil fuel industry’s global expansion.
Ira Joseph, a senior research associate at Columbia University’s Center on Global Energy Policy, said the LNG market is already oversaturated. He believes the industry could peak between 2026 and 2030, leading to a steep drop in gas prices.
“The impediments to LNG projects going forward are as much commercial as they are policy driven,” Joseph said.
The study’s results could also have ripple effects and influence whether potential LNG buyers in other countries choose to enter into long-term contracts for U.S. natural gas. Joseph said LNG companies have continued courting new customers, but they’ve struggled to bring on enough investors to move forward with construction.
“That to me is the more significant potential barrier to expanding LNG exports than anything really involving permitting,” he said.
Proponents of the natural gas industry lashed out against the Biden administration, calling the study rushed and politically-driven. The Center for LNG, an LNG advocacy group, said it believed the energy department may have mischaracterized the study’s findings.
“We look forward to working with the incoming Trump administration to create lasting regulatory certainty for U.S. LNG exports. The U.S. LNG industry would like to restore an export authorization process that is reliable, durable, and thorough to fully unlock the benefits of U.S. LNG for all Americas for years to come,” said Charlie Riedl, the center’s executive director.
Granholm said she hopes the Trump administration will use the study to determine if each LNG project is in the best interest of all the American people, not just the fossil fuel industry.
“Further increasing exports unconstrained would surely generate more wealth for the LNG industry. But American consumers and communities and our climate would pay the price,” Granholm said.
