The U.S. Department of Energy (DOE) recently released a report stating that increased liquefied natural gas (LNG) exports from the United States would result in higher electricity and natural gas prices, along with heightened greenhouse gas emissions. Secretary of Energy Jennifer Granholm led the study to reveal the “triple-cost” impact of expanding LNG exports on American consumers. In January, the Biden administration temporarily halted LNG export permits to update environmental and economic analyses, a decision that faced legal challenges and sharp criticism from President-elect Trump, who pledged to lift the pause.
The Impact on Prices and Emissions
Over the past five years, LNG exports from the United States have tripled, with projections indicating they could double by 2030. If current approval rates continue, these exports might double again, equating to half of the nation’s current natural gas production. The DOE report emphasized that the increase in LNG exports would boost greenhouse gas emissions and displace more renewable energy than previously estimated. Tyson Slocum from Public Citizen points out that the rapid expansion of exports has disrupted domestic energy markets and exposed them to increased price volatility.
According to the DOE, the surge in LNG exports will predictably raise Henry Hub natural gas prices by 31% in 2050, translating to an average annual increase of $122.54 in household natural gas and electricity costs. Consequently, the average electricity bill is expected to rise by 3.5% by 2050 because of higher gas prices. Trevor Higgins from the Center for American Progress noted that LNG exports generally replace clean energy rather than coal, possibly resulting in an additional $10 per month added to household electricity bills.
Industrial Sector Concerns and Industry Criticisms
The organization known as the Industrial Energy Consumers of America (IECA) agreed with the DOE’s conclusions, stating that the overall energy costs for the industrial sector could rise by $125 billion between 2020 and 2050, thus fostering inflationary pressures. IECA President Paul Cicio advocated for policies to mitigate the adverse effects of rising LNG exports on U.S. consumers, emphasizing the need for protective measures to shield industrial sectors from escalating energy costs.
However, the DOE’s report has not gone without criticism. The American Gas Association (AGA) and the American Energy Alliance (AEA) criticized the study, alleging that it misrepresented the benefits of American energy production and leadership. They argue that the report is a misstep that could undermine the nation’s energy independence and dominance. The DOE has opened a 60-day public comment period to gather feedback on the report, although it has no plans to amend the study based on these comments. The feedback will guide future export decisions. AGA President Karen Harbert contended that the temporary halt on LNG exports is a mistake leading to market uncertainty.
Divergent Views and Policy Implications
The U.S. Department of Energy (DOE) recently released a report indicating that boosting liquefied natural gas (LNG) exports from the United States would lead to higher electricity and natural gas prices, coupled with an increase in greenhouse gas emissions. This study, spearheaded by Secretary of Energy Jennifer Granholm, underscores the “triple-cost” impact of increasing LNG exports on American consumers. In January, the Biden administration imposed a temporary halt on LNG export permits to revise environmental and economic analyses. This decision sparked legal challenges and sharp criticism from President-elect Trump, who promised to lift the pause once in office. The DOE’s findings highlight significant economic and environmental consequences tied to expanding LNG exports, making it a contentious issue with strong opinions on both sides. The report sheds light on the complex interplay between energy policy, consumer costs, and environmental impact, which remain at the forefront of national discussions.
