U.S. energy industry leaders blasted a new Biden administration report urging limits on liquid natural gas exports as deceptive and driven by politics.
In the report, Energy Secretary Jennifer Granholm acknowledged the industry helped provide jobs to Americans but argued increasing LNG exports would harm the U.S. economy in the long term.
“Unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30 percent,” Granholm said Tuesday.
The Energy Department’s study followed President Biden’s decision in January to enact a “temporary pause” on LNG exports and export terminal approvals. Biden justified the pause by describing “the climate crisis for what it is: the existential threat of our time.”
“We have recently lived through the real-world ripple effects of increased energy prices domestically and globally since the pandemic,” Granholm said, arguing that “a business-as-usual approach is neither sustainable nor advisable.”
Several independent studies appear to rebut the administration’s findings.
A Texas Oil & Gas Association-commissioned study reported natural gas prices at Louisiana’s Henry Hub in February 2024 were at their lowest since 1994. “LNG exports have spurred production and fostered productivity gains, thus contributing to sustained downward pressure on prices,” the study concluded.
The S&P Global review reported U.S. household gas prices would be negligibly affected by increased LNG exports. Analysts noted gas prices trended downward, “interrupted only temporarily by the combination of rapid post-COVID growth and Russia’s invasion of Ukraine in 2022.”
S&P found the use of natural gas and renewables in power generation helped coal demand decline by 2.9 percent yearly. It suggested countries would use coal or non-U.S. LNG to generate energy if the pause remained in place.
Craig Stevens with the Grow America’s Infrastructure Now Coalition dismissed the claim that higher LNG exports would lead to higher natural gas prices at home.
“Despite record exports, Americans enjoy among the lowest residential natural gas prices in the world, and since we began seriously exporting LNG in 2016, natural gas prices have averaged 37 percent lower than the decade before,” he said.
The United States is the world’s largest exporter of LNG. Part of that is because of European countries moving on from Russian LNG after its 2022 invasion of Ukraine. American exports to Europe rose 119 percent that year and remain at record levels, according to the U.S. Energy Information Administration.
The Biden administration argues there is no reason to expand exports further. “The amounts that have already been approved will be more than sufficient to meet global demand for U.S. LNG for decades to come,” Granholm said.
She also asserted global emissions would rise as LNG exports rose, specifically from larger U.S.-based projects. “(It) would yield more annual greenhouse gas emission by itself than 141 of the world’s countries each did in 2023,” Granholm said. She added that U.S. LNG exports replace renewable energy plans, instead of fossil fuels.
That ignores history, according to PetroNerds CEO Trisha Curtis.
“In the U.S., as we increased our natural gas production, and we use more natural gas from the shale revolution, our emissions went down very, very simplistically, because we’re using less coal and we put in more natural gas into our power generation,” she said.
Curtis added that increased natural gas exports allow other countries to choose whether they want to move away from coal to natural gas.
Statistics show the natural gas industry significantly contributes to the U.S. economy.
An S&P Global review, released the same day as the administration’s study, reported that the LNG industry contributed $408 billion to the U.S. gross domestic product and supported 273,000 jobs annually.
American Energy Alliance President Tom Pyle said Granholm’s report is another example of the White House looking to suppress American energy.
“This whole effort has been nothing more than an equation in search of a solution to a problem that never existed,” he said. Pyle said Granholm once couldn’t answer how many barrels of oil the country consumed in a day.
President-elect Trump has nominated Liberty Energy CEO Chris Wright to be his energy secretary. Curtis called Wright the most knowledgeable person on energy who has served in Washington.
“He understands how you actually produce oil and gas in the U.S. and how that market works, but deeply understands energy, and is an expert in energy,” she said.
It’s a view shared by Amanda Eversole with the American Petroleum Institute.
“Chris is a talented executive, and he really understands — not just the oil and gas sector, though that’s incredibly important — but he’s also an ‘all-of-the-above’ kind of guy. I’m very optimistic that, by bringing somebody with both technical expertise and business acumen to the administration, we’re going to see great benefits going forward.”
Meanwhile, Granholm’s final work product for the administration isn’t likely to carry much weight once Trump is sworn in.
“I look forward to this (LNG) study being thrown in the trash bin on January 20, 2025, because that’s where it belongs,” quipped Pyle.
