“Drill Baby Drill” is an empty slogan.
The plan is for you to pay more for electricity, and for the fossil fuel industry’s profits and power to rise in perpetuity.
Lt. Gen. Russel L. Honoré in Utility Dive:
Lt. Gen. Russel L. Honoré (Ret.) is a former commanding officer of the U.S. First Army. He is currently head of The Green Army, an organization dedicated to finding solutions to pollution.
Just months after declaring a false “energy emergency,” the administration is moving to sell more American gas overseas, including to our competitors. It’s not only a disaster for the climate and our national security, but it will push American’s electricity bills through the roof.
Energy prices are already skyrocketing. Electricity providers and their representatives are blaming regulators. Some elected officials, understandably under fire from their constituents, point the finger at greedy corporations. Meanwhile, apologists for fossil fuel companies are writing trendy think pieces putting the blame for high prices at the feet of green energy providers. The evidence for those claims are even thinner than the paper they’re printed on.
There are plenty of factors at play that can explain rising energy costs. Some, like the huge demands placed on the grid by power thirsty data centers, crypto mining operations and AI are already widely known. But the role of LNG exports is not receiving nearly enough public scrutiny, especially since gas prices all but set electricity prices.
While it’s been billed as “clean, American energy,” or “liquefied natural gas,” the product we’re talking about is a fossil fuel. It’s mostly methane, the greenhouse gas that traps 80 times more heat in the atmosphere than does carbon dioxide. Its liquefied form, which is pumped into massive supertanker ships and sold overseas, comes at an enormous cost, requiring massive outlays of energy to chill the fuel into a liquid form. It also harms our climate along every step of its journey as it leaks into the atmosphere from the well head, through the pipeline, to liquefaction, shipping and eventually burning by the end user.
Taking gas out of the ground contributes to global warming. Processing it and shipping it overseas accelerates that impact.
Here’s an uncomfortable truth: more than 40% of all electricity generated in the United States comes from methane gas. While we need to move rapidly toward more renewable energy, we can’t ignore the fact that gas is in great demand here at home. Allowing more gas to be sold overseas gives a windfall to corporate executives who profit from exports as well as from the higher prices they cause here at home by creating scarcity in the market.
The US Henry Hub gas price has been among the global energy market’s most stable benchmarks. Over the past 10 years, annual average prices have rarely moved outside a relatively narrow range of US$2.50 to US$3.50/mmbtu, as ample low-cost supply and high market liquidity helped manage price volatility.
Those days could soon be over. While there’s a widespread view that US gas prices will increase as demand rises, we believe Henry Hub could be trading as high as US$5/mmbtu by 2035 and continuing upwards to US$7/mmbtu by 2050. Massimo Di-Odoardo and Dulles Wang from our gas and LNG team see four main drivers behind this.
First, the rising call for gas from the US LNG sector
Among the raft of executive orders signed by President Donald Trump in January was the lifting of the pause on new LNG export approvals, quickly followed by the first new export permits. Woodside’s 16.5-mmtpa Louisiana LNG project has already taken final investment decision this year, and others look set to follow soon. We now anticipate six US Gulf Coast projects to move ahead by 2027, adding an additional 68 mmtpa of capacit y on top of the 65 mmtpa currently under construction.