Mark Wolfe, executive director of the National Energy Assistance Directors’ Association and co-director of the Center on Energy Poverty and Climate, and Tyson Slocum, director of Public Citizen’s Energy Program, published an op-ed in Newsweek outlining how skyrocketing US fossil gas exports are exposing US consumers to higher energy bills.
Americans are accustomed to seeing the price of gasoline swing up and down due to global market conditions that we have limited control over. But the price of natural gas used to heat our homes and run power plants has largely been insulated from sudden price shocks because of the nation’s limited capacity to export domestic natural gas production, usually in the form of liquified natural gas (LNG).
LNG exports were nonexistent before 2016. But in just a few short years, the United States has become the world’s largest LNG exporter, which fuels record domestic natural gas production. The U.S. now produces as much natural gas as the next two largest producing countries, Russia and Iran, combined. In 2015, only about 7 percent of U.S. gas production was exported. Now that proportion has risen to about 20 percent of production.
Nearly 70 percent of oil and gas executives believe that the increase in exports is ending “the age of inexpensive U.S. natural gas,” according to a September 2022 survey by the Federal Reserve Bank of Dallas. A Goldman Sachs energy analyst said, “The U.S. exports LNG and exports energy security to the rest of the world, but imports volatility.” Now, for the first time in U.S. history, the rising share of natural gas exported in the form of LNG is radically upending domestic energy markets. As a result, American families are competing with Berlin and Beijing for natural gas that is shipped overseas.
The Federal Energy Regulatory Commission (FERC), in a recent assessment of U.S. winter energy market conditions, concludes that growth in exports, including from LNG export facilities “will place additional pressure on natural gas prices this winter” and added that the export boom “has integrated formerly disparate North American regional natural gas markets into the global market.”
There will be increased pressure on domestic markets because even more LNG production facilities are in the construction pipeline, which will lead to even greater exports of US produced natural gas Federal energy forecasters expect LNG export capacity from the U.S., Canada, and Mexico to more than double by the end of 2027 due to the addition of 10 new terminals and terminal expansions. If it wasn’t for the Biden administration’s pause on pending applications, by 2036, about 35 percent of U.S. natural gas production would be expected to be exported, with about 25 percent leaving the country in LNG tankers, according to an analysis of federal projections.
The energy industry has disingenuously pitched exported natural gas as a climate solution. However, a recent analysis by Cornell University professor Robert Howarth found that the climate impacts of LNG are worse than that of coal, partly due to the large volume of leaks into the atmosphere and that large amounts to greenhouse gas emissions are derived from the expensive and energy-intensive process used to freeze gas into liquified form. And if that wasn’t bad enough, another analysis found that if all LNG export projects in the pipeline are approved, the resulting greenhouse gas emissions equal that of more than 1,000 coal-fired power plants. One gas export terminal in Texas, for example, was a leading contributor to the region’s air pollution jumping 83 percent in recent years.