The Biden Administration released a report analyzing the effects of new LNG export projects on Dec. 17—and fossil fuel advocates were left fuming.

But the long-awaited report stopped short of saying new authorizations for U.S. LNG export projects were not in the best interest of the public.

President Joe Biden formally paused approvals for new LNG export projects in January, slamming the brakes on billions of dollars of investment by energy companies.

The Department of Energy’s (DOE) plan called for an updated analysis of the environmental, economic, emissions and national security implications of new LNG export authorizations.

The LNG pause was praised by environmentalists but drew swift condemnation by oil and gas players.

“The Biden administration’s pause on American LNG exports was a mistake that resulted in uncertainty for the market, for investors, and for America’s allies around the world,” said American Gas Association’s President and CEO Karen Harbert. “This report is a clear and inexplicable attempt to justify their grave policy error. America’s allies are suffering from the weaponization of natural gas and energy deprivation and any limitations on supplying life essential energy is absolutely wrong-headed. We look forward to working with the incoming administration to rectify the glaring issues with this study during the public comment period.”

In a Dec. 17 statement accompanying the report, Energy Secretary Jennifer Granholm said the pace of growth in U.S. LNG exports in recent years “is truly astounding” and summarized several key findings. But she also acknowledged that “decisions about the future of LNG export levels will necessarily be made by future Administrations.”

Oversupply and demand concerns

At the current growth trajectory, U.S. LNG exports will quickly outpace global demand, Granholm said.

“By itself, this rapid growth to date—and the continued growth we expect under existing authorizations —recommends a cautious approach going forward,” she said.

The DOE forecasts that U.S. LNG exports will double by 2030, “and could double yet again under existing authorizations.”

Some of the gas will head to buyers in Europe, where U.S. LNG “has proven critical” for allies weaning themselves off Russian gas, Granholm said.

But the DOE expects European demand to decline substantially as European nations work to reduce greenhouse gas (GHG) emissions.

DOE forecasts also show that LNG demand “has already peaked in Japan, and growth is expected to flatten in South Korea by 2030.” China, meanwhile, is expected to drive most of the future LNG demand in Asia, according to the report.

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Higher domestic prices

The DOE’s updated analysis found that domestic gas consumers of all kinds—“from households to farmers to heavy industry”—would face higher energy prices from increased U.S. LNG exports.

Unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30% and would increase costs for the average American household by over $100 per year by 2050.

As natural gas prices increase, electricity costs are expected to rise in tandem. The DOE also highlighted the increased costs for consumers from the “pass-through” of higher energy costs to manufacturers.

“The new study finds that from 2020 to 2050, the overall energy costs for the industrial sector would go up $125B, leading to additional potential price increases for a wide range of consumer goods.”

Natural Allies for a Clean Energy Future called spikes in domestic gas supply pricing due to LNG a myth.

“Domestic natural gas prices have been stable despite rapid growth in the U.S. LNG export volume,” the group said Dec. 17. “Henry Hub prices, a key trading point for the market in the Gulf of Mexico, have largely remained stable and only see real spikes during extreme weather events, the invasion of Ukraine, and demand growth after COVID. Natural gas supplies in the United States remain abundant and affordable, and we must continue to build out infrastructure to move energy where and when it’s needed.” 

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Higher emissions

Granholm said expanding LNG exports warrants a close and rigorous focus “in a world that needs to quickly reduce greenhouse gas emissions substantially across the board” to meet global commitments.

While some importers have used LNG to reduce reliance on coal, the DOE’s study purports to show that additional U.S. LNG exports would displace more renewables than coal globally.

In a scenario where exports exceed currently authorized levels, the report found that direct emissions would be 1.5 gigatons of CO2 per year—over 25% of current U.S. annual GHG emissions.

Granholm said special scrutiny needs to be applied toward “very large” LNG projects.

“An LNG project exporting 4 [Bcf/d]—considering its direct life cycle emissions—would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023,” she wrote.

An IFC report found that without U.S. LNG exports, the world would have seen higher greenhouse gas emissions. The net impact of U.S. LNG was to decrease 2022 world GHGs by 112 million metric tons compared to the estimated mix of alternative fuels. Without U.S. LNG exported abroad, that energy would be replaced with 54% coal, 34% fuel oil, 16% domestic natural gas, and 7.8% renewable sources, according to the report.

Dave Cortez, director for the Sierra Club Lone Star Chapter tied LNG to “everyday Texans” experiencing ongoing drought, skyrocketing electricity prices and record high temperatures.

All of that has been made worse by the expansion of LNG exports on the Gulf Coast, he said.

“At a time when fossil fuel-financed politicians are working daily to expand taxpayer handouts to wealthy, polluting energy corporations, it is very welcome news to see the Department of Energy reflect what so many coastal Texans have been saying for years: We don’t need more LNG.”

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Public interest

The DOE stopped short of arguing that new U.S. LNG export authorizations were not in the best interest of the public.

The U.S. Secretary of Energy has the responsibility to evaluate whether such authorizations of exports to non-free-trade-agreement countries is consistent with the public interest.

Granholm said that the comment period for the current study will extend into the next Trump Administration, and that there are a limited number of applications currently ready for the DOE’s public interest review.

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