The U.S. Department of Energy Completed an Update of the Studies that Inform its Public Interest Determination for LNG Export Applications to non-Free Trade Agreement Countries, a Requirement Authorized by Federal Law.
December 17, 2024
Washington, D.C. – The U.S. Department of Energy (DOE) today released an updated study of U.S. liquefied natural gas (LNG) exports. DOE has been given the responsibility by Congress under the Natural Gas Act to evaluate the public interest of proposed exports to countries with which the United States does not have a Free Trade Agreement.
The study, released today, will have a 60-day comment period that will begin once published in the Federal Register.
“Unconstrained exports of LNG would increase costs for the average American household by well over $100 more per year by 2050. We have recently lived through the real-world ripple effects of increased energy prices domestically and globally since the pandemic. Middle and low-income households already face energy bills that are too high. In parts of the South, the export-induced price increase would put some households over the energy burden threshold, further challenging their ability to meet basic needs,” wrote U.S. Secretary of Energy Jennifer M. Granholm in her statement.
“In fact, DOE analysis exposes a triple-cost increase to U.S. consumers from increasing LNG exports – the increasing domestic price of the natural gas itself, increases in electricity prices (natural gas being a key input in many U.S. power markets), and the increased costs for consumers from the pass-through of higher costs to U.S. manufacturers. On the latter point, 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.”
The public is encouraged to submit comments, which will inform how DOE may apply the study’s findings to its public interest analysis of export applications going forward. This is consistent with DOE’s past practice.
“This study confirms what I’ve been saying for years – surging LNG exports are bad for consumer pocketbooks, bad for communities near its extraction and export infrastructure, and bad for a cleaner and healthy future. This Energy Department study includes strong findings that bolster arguments that LNG exports are not in the public interest. While I had hoped the study would recommend the United States stop LNG exports altogether, this study at least lays out clear evidence for why this unprecedented boom in fossil fuel exports is harmful,” said Senator Edward J. Markey (D-Mass.), a member of the Environment and Public Works Committee. “I continue to urge the Biden administration to reject pending LNG export applications based on all the existing evidence that LNG exports increase costs here at home and increase greenhouse gas emissions. Our allies abroad don’t need these fossil fuels, Americans don’t need these exports, and our climate doesn’t need more pollution — the only ones who benefit from this bonanza are big fossil fuel executives. Unless the Trump administration wants to raise costs for American households by more than $100 a year, it should stop LNG exports, too.”
Additional to the study release, and subsequent publication in the Federal Register, U.S. Energy Secretary Jennifer M. Granholm released a Secretarial Statement outlining departmental leadership’s perspective on the final study. FULL STATEMENT.
Excerpts:
“Today’s publication reinforces that a business-as-usual approach is neither sustainable nor advisable.
‘DOE analysis exposes a triple-cost increase to U.S. consumers from increasing LNG exports – the increasing domestic price of the natural gas itself, increases in electricity prices (natural gas being a key input in many U.S. power markets), and the increased costs for consumers from the pass-through of higher costs to U.S. manufacturers.
‘Special scrutiny needs to be applied toward very large LNG projects. An LNG project exporting 4 billion cubic feet per day – 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.
‘…any sound and durable approach for considering additional authorizations should consider where those LNG exports are headed, and whether targeted guardrails may be utilized to protect the public interest.’… ‘the demand for LNG in the People’s Republic of China – already the world’s largest importer – is expected to nearly double between now and 2030 and become the highest of any country by 2050. PRC entities have already signed several contracts with operating or proposed U.S. LNG projects.
‘In the decade to come, we will see strong and mounting pressure within our democratic system to ensure that the United States uses its market position in a way that truly advances our national interest and energy security, which must include the needs of American workers, American families, and our responsibility to address the climate crisis. In our view, the question is not whether U.S. export policy will be forced to respond to those interests, but when and what that response is.”
The U.S. liquefied natural gas export sector has experienced transformative and unprecedented growth in just a decade, with the first LNG exports from the lower-48 states commencing in 2016. DOE has authorized 48 billion cubic feet per day (Bcf/d) of natural gas for export, or nearly half of current domestic production.
Of this 48 Bcf/day in total authorized exports, 14 Bcf/d of associated capacity is now operating, making the U.S. the largest exporter of LNG in the world. Another 12 Bcf/d is under construction and expected to double present export volumes by 2030, at which time the U.S. will remain the top exporter, exceeding other countries by roughly 40 percent based on announced expansions. And a further 22 Bcf/d of capacity exports has been approved by DOE, but has not secured a final investment decision to begin construction.
Given these robust export commitments already made, and before considering additional applications that would take authorized U.S. natural gas exports beyond levels previously evaluated, DOE leadership recognized the need for a comprehensive update to ensure the most comprehensive and up-to-date analysis possible of market, economic, national security, and environmental considerations of different potential volumes of U.S. LNG exports.
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Background: DOE LNG Snapshot Sep 30 2024.pdf