Energy Department finds gas exports harm climate, raise prices
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The Biden administration said Tuesday it concluded that unrestricted liquefied natural gas exports will increase greenhouse gas emissions and cause gas prices to rise.
Why it matters: The long-awaited Energy Department study — which coincided with a controversial pause on issuing LNG export licenses — details potential harms of shipping out U.S. gas as exports have dramatically increased.
- The findings could make it more difficult for the incoming Trump administration to justify approving licenses and will arm LNG opponents with official data.
Zoom in: Increases in LNG exports displace more renewable energy than coal globally, Energy Secretary Jennifer Granholm said in a statement.
- One scenario of increasing LNG exports would result in direct emissions of 1.5 gigatons per year by 2050 — roughly a quarter of all current U.S. emissions, Granholm said.
- Unfettered exports would raise wholesale U.S. natural gas prices by 30%, increasing costs for the typical American household by well over $100 more per year by 2050, the report found.
- Further increasing gas exports "would surely generate more wealth for the LNG industry, but American consumers and communities and our climate would pay the price," Granholm said on a call with reporters.
The other side: The U.S. Chamber of Commerce said it was putting its trust behind a different study — conducted by S&P Global and funded by the business lobby — that analyzed LNG's benefits.
- "We will thoroughly review the DOE report, but it appears to rely on questionable methodology and puts a thumb on the scale to downplay the clear economic, environmental and security benefits of U.S. LNG," the chamber said in a statement.
Big picture: DOE officials argue that current U.S. gas exports are sufficient to serve the global market.
- Nearly 49 billion cubic feet a day (bcf/d) of already approved gas exports will continue flowing this decade, regardless of future export approvals. Nearly 15 bcf/d is currently operating.
- The DOE oversees authorization of gas exports to countries with which the U.S. does not have a free trade agreement, while FERC must review applications to construct the LNG facility.
What's next: The report is final, but the agency is putting it out for a 60-day public comment period to inform decision-making going forward, DOE said.
- "The final decision is in the hands of the next administration," Granholm said. "We hope they will take these facts into account."
- There's a "clear pattern" of the agency reviewing LNG export licenses based on analyses performed by prior administrations, a DOE official said.
Once President-elect Trump takes office, the study could delay his intent to approve pending applications by "anywhere from several months to several calendar quarters to revise or revisit study results," ClearView Energy Partners said in a recent note to clients.
