Increased U.S. liquefied natural gas exports will contribute to higher electricity and natural gas prices, as well as increased greenhouse gas emissions and other costs, according to a U.S. Department of Energy study published Tuesday.
The report “exposes a triple-cost increase to U.S. consumers from increasing LNG exports,” Secretary of Energy Jennifer Granholm said in a statement.
The Biden administration hit pause on LNG export permits in January, to allow DOE to update the underlying environmental and economic analysis for authorizations. That decision was challenged in court and President-elect Trump has vowed to end the pause, leading the Biden administration to request an end to the litigation.
U.S. LNG exports have tripled over the past five years, will double again by 2030 and could double again under existing authorizations, Granhom said. “The quantities already approved for export equate to roughly half of the U.S.’s total current natural gas production today.”
DOE’s report shows increased LNG exports would increase emissions of greenhouse gases as well as displacing more renewable energy than the gas industry has previously claimed, according to Public Citizen.
“The explosion of exports has upended domestic energy markets ... and has exposed American energy markets to increased price volatility and episodes of sharply higher prices,” said Tyson Slocum, director of Public Citizen’s energy program.
Under a high-export scenario, 2050 Henry Hub natural gas prices increase 31%, in 2022 dollars, the report estimated. That means up to a $122.54 annual average increase for natural gas plus electricity expenditures across all households, according to the report.
The increased 2050 gas prices will add about 3.5% to average electricity bills, DOE concluded.
“This report clearly shows the harm resulting from unfettered LNG exports,” Trevor Higgins, senior vice president of energy and environment at the Center for American Progress, said in a statement “Shipping American fuel overseas mostly displaces clean energy, not coal — and will add roughly $10 per month to household electricity bills.”
The Industrial Energy Consumers of America said they agreed with DOE’s findings, including that between 2020 and 2050 overall energy costs for the industrial sector will go up $125 billion and lead to inflationary impacts.
The U.S. only exports about 10% of its gasoline and less than a quarter of its crude production, but has approved an LNG export volume equal to 50.5% of 2023 net supply, IECA President Paul Cicio said. “Consumers are completely exposed,” he said.
IECA urged the DOE and Congress to “put in place a policy to insulate the U.S. from the negative impacts of increased LNG exports.”
The American Gas Association criticized DOE’s report. “We look forward to working with the incoming administration to rectify the glaring issues with this study during the public comment period,” the group said.
American Energy Alliance President Thomas Pyle said DOE’s report “misrepresents the economic and environmental benefits of America’s global leadership in energy production.”
“The study epitomizes four years of misguided energy policy that has consistently undermined American energy independence ... [and] is one more in a long list of actions the Biden-Harris Administration has taken to suppress American energy dominance,” Pyle said.
DOE has opened a 60-day comment period, though the agency said it does not intend to revise the study. Instead, any comments it receives will inform determinations in future export proceedings.
“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 AGA President and CEO Karen Harbert. “This report is a clear and inexplicable attempt to justify their grave policy error.”
