The United States should proceed cautiously as officials consider new natural gas export terminals, Energy Secretary Jennifer Granholm said Tuesday, warning that “unfettered exports" of liquefied natural gas, or LNG, could raise wholesale domestic prices by more than 30% and increase planet-warming greenhouse gas emissions.
Granholm's statement came as the Energy Department released a long-awaited study on the environmental and economic impacts of natural gas exports, which have grown exponentially in the past decade. The analysis found that U.S. LNG shipments drive up domestic prices and frequently displace renewable energy sources such as wind and solar power.
Increased LNG exports also would lead to higher global greenhouse gas emissions, even with use of technology such as equipment to capture and store carbon emissions, the report said.
“Today’s publication reinforces that a business-as-usual approach (to LNG exports) is neither sustainable nor advisable,'' Granholm said.
The Energy Department report comes after the Biden administration paused approvals of new LNG projects in January to study the effects LNG exports have on the planet. Natural gas emits methane, a potent greenhouse gas, when burned, leaked or released.
LNG is especially energy intensive, since the gas must be retrieved through underground drilling, then piped to export terminals along the East and Gulf coasts. The gas is then “superchilled” into a liquid that is taken by tanker ships to import terminals in Europe and Asia, where it is then reheated into gas and distributed for business and family use.
The oil and gas industry, along with Republican allies in Congress, have decried the LNG pause as unnecessary and counter-productive, and President-elect Donald Trumphas vowed to end the pause on his first day in office. The pause is on hold under a federal court order, but few new terminals have been approved in the past year.
The Energy Department said last week it will not decide on two major LNG export projects in Louisiana until the independent Federal Energy Regulatory Commission completes environmental reviews of each project.
The American Gas Association called the Biden administration's pause a mistake that has resulted in uncertainty for the global market, investors and America’s allies around the world.
“This report is a clear and inexplicable attempt to justify their grave policy error," said AGA president and CEO Karen Harbert. “America’s allies are suffering from the weaponization of natural gas and energy deprivation, and any limitations on supplying life essential energy is absolutely wrong-headed."
Harbert said the industry group looks forward to working with the Trump administration “to rectify the glaring issues with this study during the public comment period,” which lasts until mid-February.
Charlie Riedl, executive director of the Center for LNG, a pro-industry group, said Republican and Democratic administrations, as well as independent researchers, “have continually found that U.S. LNG exports provide economic, national security and climate benefits and serve the public interest."
U.S. LNG “remains a vital tool for countries looking to displace dirtier fuels" such as coal and reduce their emissions, Riedl said, adding that U.S. LNG exports play a key role in meeting growing global demand for natural gas. U.S. gas shipments to Europe and Asia have soared since Russia’s invasion of Ukraine in 2022.
The LNG pause, announced by President Joe Biden as the 2024 election year began, aligned the Democratic administration with environmentalists who fear the huge increase in LNG exports in recent years is locking in potentially catastrophic planet-warming emissions at a time when Biden has pledged to cut U.S. climate pollution in half by 2030.
“While MAGA Republicans willfully deny the urgency of the climate crisis, condemning the American people to a dangerous future, my administration will not be complacent,″ Biden said in announcing the pause. His actions “heed the calls of young people and frontline communities who are using their voices to demand" climate action, Biden added.
The White House declined to comment on the Energy Department study, referring questions to the agency.
