In a recent address, U.S. Energy Secretary Jennifer Granholm advised caution in the consideration of new natural gas export terminals, emphasizing that reckless exports of liquefied natural gas (LNG) could lead to increased domestic prices and have detrimental effects on the environment. Granholm’s remarks followed the release of a new study by the Energy Department that evaluated the economic and environmental consequences of natural gas exports, which have seen significant growth over the past decade.
The study highlighted that increased U.S. LNG exports are driving up wholesale prices domestically, often pushing renewable sources such as wind and solar power out of the market. Furthermore, it noted that while new technologies aimed at capturing carbon emissions are being developed, the rise in LNG exports would still result in higher global greenhouse gas emissions.
Granholm pointed out that unrestricted LNG exports could spike domestic natural gas prices by over 30%, translating to an added cost of approximately $100 annually for American families by 2050. She noted the realities of escalating energy prices, both domestically and globally, which have emerged in the aftermath of the COVID-19 pandemic. According to her, the notion of an “export-induced price increase” would further strain families’ ability to manage basic expenses.
The Energy Department’s investigation comes in the wake of the Biden administration’s decision to halt new LNG project approvals earlier in the year to assess the broader impacts of LNG exports. Natural gas, while vital for energy, also releases methane—a greenhouse gas—during extraction and transport.
The oil and gas sector, supported by Republican leaders in Congress, has criticized the suspension of LNG project approvals as misguided and counterproductive. President-elect Donald Trump has promised to overturn this pause on the first day of his administration. Although a federal court has intervened, delaying the pause, the Energy Department has stated that it will wait for the Federal Energy Regulatory Commission’s environmental reviews before deciding on two significant LNG projects planned for Louisiana.
Trump’s transition team avoided addressing the recent study directly but expressed his commitment to boost American energy and preserve energy jobs. Their spokesperson stated that the substantial electoral support for Trump signaled a mandate to implement campaign promises, including reducing energy costs for consumers.
However, the findings of the study could pose challenges to Trump’s intentions to expedite LNG projects. Trump recently announced that any investment over $1 billion would receive accelerated approvals, including for environmental permits. Environmental advocates have indicated that they plan to leverage the Department of Energy’s findings in anticipated lawsuits regarding any LNG project greenlights from the Trump administration, labeling these export terminals as “climate bombs.”
To produce LNG, significant energy is required for extraction, transporting the gas to export facilities on the East and Gulf coasts, and then cooling it into a liquid state for shipment overseas. Once received at terminals in Europe and Asia, the LNG is then converted back into gas for consumer usage.
Leaders from the American Gas Association criticized the Biden administration’s moratorium, labeling it as a detrimental mistake that has created unpredictability in global markets and harmed relations with allies. The association’s president articulated their belief that the report attempts to validate poor policy decisions and expressed eagerness to collaborate with the incoming Trump administration to address perceived flaws in the study during the public input period.
The report’s release coincided with an independent analysis suggesting that expanded LNG exports could support nearly 500,000 jobs in the U.S. and add $1.3 trillion to the country’s GDP by 2040. According to S&P Global, this analysis anticipates that the U.S. LNG export capacity will double within the next five years, with minimal repercussions for domestic price levels.
Proponents of LNG exports assert that they play a crucial role in helping nations transition away from more polluting energy sources like coal. The demand for U.S. gas abroad surged following the Russian invasion of Ukraine in 2022. The Biden administration’s halt on new LNG projects aligns with efforts to reduce emissions as part of its commitment to cut U.S. climate pollution by 50% by 2030, a response fueled by pressure from environmental advocates concerned over the rapid increase in LNG exports.
Environmental groups welcomed the Department of Energy’s findings, highlighting the substantial dangers that LNG poses to climate, public health, and national security. Activists warning against Trump’s plans to boost LNG exports claimed that such actions would result in significant harm, including exacerbated climate challenges and financial burdens on consumers. They cited the potential impacts on vulnerable species, referencing threats to the Rice’s whale in the Gulf of Mexico due to drilling operations.