DOE Highlights Concerns Over Rising LNG Exports and Their Impacts

Despite claims that LNG displaces coal overseas, the DOE’s analysis reveals that increased exports could more often replace renewable energy sources, undermining global efforts to limit warming to 1.5°C.

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U.S. Secretary of Energy Jennifer M. Granholm has emphasized the need for a cautious approach to liquefied natural gas (LNG) export authorizations, citing critical findings from updated analyses under the Natural Gas Act. This framework requires the Department of Energy (DOE) to evaluate whether LNG exports to non-free-trade-agreement countries align with the public interest. This determination encompasses economic, environmental, and consumer impacts.

The newly finalized analyses, now open for public comment, provide a comprehensive assessment of the implications of LNG export growth. Granholm outlined key findings that underscore the complexities of this issue.

Surging LNG Exports Outpacing Demand

The DOE’s report highlights the rapid growth of U.S. LNG exports, which have tripled in the past five years and are projected to double again by 2030. Already authorized export volumes could double once more, equating to approximately 50% of current U.S. natural gas production. Four out of five modeling scenarios suggest that existing authorizations will more than meet global demand for decades, warranting a cautious review of future applications.

Economic Strain on U.S. Consumers

While LNG exports boost revenue for facility owners and jobs along the natural gas supply chain, the DOE’s study warns of significant cost increases for domestic consumers. Unrestricted exports could raise wholesale natural gas prices by over 30%, leading to annual household energy costs climbing by more than $100 by 2050. Additionally, industrial sectors face $125 billion in added energy expenses through 2050, potentially inflating the cost of consumer goods. Export-driven price volatility could further expose U.S. consumers to global market fluctuations.

Environmental and Community Impacts

Granholm called attention to the disproportionate burden on communities near LNG facilities, which are already grappling with pollution from refining and petrochemical industries. Pollutants such as methane and nitrogen oxides contribute to higher mortality rates in these areas. The DOE has requested further public input on LNG projects’ health, economic, and environmental effects, underscoring the importance of equity in decision-making.

Despite claims that LNG displaces coal overseas, the DOE’s analysis reveals that increased exports could more often replace renewable energy sources, undermining global efforts to limit warming to 1.5°C. By 2050, emissions from LNG exports could exceed 25% of current U.S. greenhouse gas emissions, potentially surpassing entire nations’ lifecycle emissions. Regulatory measures to curb methane emissions and account for greenhouse gas intensity across the LNG supply chain are essential for mitigating these impacts.

Targeted Export Strategies for Public Interest

The DOE suggests adopting a more nuanced framework for evaluating LNG export applications, including consideration of destination markets. While U.S. LNG has been vital for Europe’s energy security, demand in key regions such as Japan and South Korea is plateauing. China is poised to become the largest importer. The report emphasizes the need for guardrails to balance energy security, economic interests, and climate commitments.

Looking Ahead

The DOE paused new LNG export decisions earlier this year, pending the completion of this study. With the comment period extending into the next administration, Granholm stressed the importance of basing future decisions on these findings to protect American families, workers, and the environment.

“As energy prices rise and communities bear the burden of these exports, the U.S. must ensure its policies truly advance national interests,” Granholm stated. “This is not a question of if, but when and how we respond to these growing challenges.”

The updated analyses aim to guide policymakers in crafting a balanced and sustainable approach to LNG export authorizations that prioritizes the public interest.

Environment + Energy Leader