The Energy Department assessments homes in on the economic risks to warn that exporting more gas could raise domestic energy costs.
The Biden administration released a long-awaited report Tuesday that could make it harder for the incoming administration to expand U.S. natural gas exports — the latest attempt by President Joe Biden’s agencies to Trump-proof his legacy.
While the report from the Energy Department stops short of recommending the U.S. cap exports, as environmentalists had demanded, it recommended that regulators take a much stricter line in determining whether the United States’ soaring gas permits are benefiting or imperiling the national interest.
That advice could give opponents of the growing trade a new tool to challenge any new liquefied natural gas plants that the energy industry seeks to build on President-elect Donald Trump’s watch. And it could hand Trump’s critics new legal tools to file challenges that frustrate his wishes.
Trump has pledged to ramp up fossil fuel production to achieve “energy dominance,” building on the sharp growth that lifted oil production to record levels this year and made the United States the world’s leading supplier of liquefied natural gas. And he has vowed to end the Biden administration’s yearlong pause on issuing new export permits once he takes office.
But the Biden administration’s report, a year in the making, warns that plans to increase exports of U.S. natural gas risk driving domestic energy prices higher.
Though Trump is expected to ignore DOE’s findings, environmental groups and consumer watchdogs said they will use its contents to bolster their legal challenges to any new project his administration approves.
The report says unfettered exports of LNG would raise costs for the average American household by “well over” $100 more per year by 2050. Much of that increase would come from increased domestic price of natural gas, a rise in cost for electricity generated by natural gas and higher costs for consumers from manufacturers.
The United States is already exporting about 12 percent of its current natural gas production via LNG tanker, as volumes have tripled over the past five years. The volume is expected to double again by 2030 and quadruple if every project the DOE has authorized starts operating, the study said.
Besides potentially hiking prices for consumers, new gas exports are more likely to displace renewable energy projects than coal plants, the report said. Exports higher than currently authorized levels would by 2050 add 1.5 gigatons of carbon dioxide equivalent, or just over 25 percent of current U.S. annual greenhouse gas emissions.
“The main takeaway is that a business-as-usual approach is neither sustainable nor advisable,” Energy Secretary Jennifer Granholm told reporters while introducing the report’s findings. “American consumers and communities and our climate would pay the price.”
The report’s findings should be enough to give groups opposed to increases in exports more ammunition to challenge approvals in court, said Lauren Parker, attorney at environmental group Center for Biological Diversity. The findings could offer fodder for lawsuits seeking to block the incoming Trump administration’s approvals of any of the export projects that are awaiting DOE’s review.
The DOE will use the study to determine whether LNG exports are in the public interest, a legal requirement under the Natural Gas Act,” Parker said in an email to POLITICO. “This new study should bolster arguments that any public interest analysis is flawed if it doesn’t recommend denying LNG export licenses, because the harms from these exports clearly outweigh the benefits.”
The long-awaited report comes after a nearly yearlong pause in the administration’s processing of new approvals for liquefied natural gas exports, which Republicans and many in the energy industry decried as a political move by Biden to appease climate activists. The report isn’t likely to prevent Trump from approving the new projects soon after entering office, said an industry lawyer who has discussed the plans with members of Trump’s transition team and was granted anonymity to discuss private conversations.
“The Trump team is really indifferent to this report,” said this person, who was granted anonymity to discuss private conversations.
Still, Granholm said the findings should inform the Trump administration’s decisions.
“We hope they’ll take these facts into account to determine whether additional LNG exports are truly in the best interest of the American people and the economy,” Granholm told reporters.
A spokesperson for the Trump transition team did not address questions on whether the new administration would take the report into consideration as it weighs whether to approve new projects.
“Families have suffered under the past four years’ war on American energy, which prompted the worst inflation crisis in a generation,” transition spokesperson Karoline Leavitt said in an email. “When he takes office, President Trump will make America energy dominant again, protect our energy jobs, and bring down the cost of living for working families.”
By highlighting the economic argument against LNG exports, the Biden administration may be hoping to reach Trump supporters with a populist economic message. When Biden officials first launched the review in January, they highlighted the climate impacts of processing and burning the gas as one of the areas of main concern. But the administration in its final product stressed the economic impacts unfettered growth in U.S. gas exports could have on domestic prices, said Tyson Slocum, energy director at government watchdog group Public Citizen.
“On the economics, it’s a no-brainer,” Slocum said in an interview. “Donald Trump and Republicans are talking about how they won the election because of moderate and low income voters concerned about rising energy prices. Here you have a peer reviewed Department of Energy study that dives into the economic elements of exports and finds those same voters are most susceptible to harm from LNG exports.”
The natural gas industry has said it can produce enough fuel to feed both the huge growth in LNG exports and the expected boom electricity consumption driven by new data centers. Despite the dramatic growth in LNG exports, U.S. natural gas prices have remained fairly steady since 2016 except a brief spike in 2022 amid post-pandemic supply crunches.
“U.S. gas production has more than tripled compared to the amount of LNG that the country exports,” Eric Eyberg, vice president, gas and power consulting at analyst firm S&P Global Commodity Insights said in a report the company unveiled the same day the DOE released its own. “That abundant supply has allowed LNG exports to support more than 270,000 jobs annually and contribute more than $400 Billion to GDP to date with no major impact to domestic prices.”
The United States started exporting modest amounts of LNG decades ago from a facility in Alaska, which sent most of its cargoes to Asia, where Japan and South Korea were major importers. But as fracking unlocked more and more oil and natural gas from the lower 48 states, export facilities were built along the U.S. Gulf Coast.
The first cargo of U.S. LNG to leave Texas came under President Barack Obama in 2016. Since then, exports have grown from 1 billion cubic feet per day to nearly 12 Bcf/d at the end of 2023, according to the U.S. Energy Information Administration, or about 14 percent of U.S. gas production. U.S. natural gas prices have remained relatively cheap compared prices in the rest of the world, but the sheer number of export facilities that have received export permits and are scheduled to come online in the next four years could double the amount of gas going overseas.
The Biden administration has approved only modest new export capacity during its four years in office. Massive new projects, including Venture Global’s CP2 expansion in Louisiana and the proposed NextDecade’s proposed Rio Grande LNG plant in Texas, are both awaiting final approvals — and both have become political footballs. Environmental groups have opposed those projects, while Republicans have decried them as casualties of the Biden administration’s environmental policy.
The industry’s backers have pointed to the exports’ role in helping keep Europe supplied with energy for heat to survive a harsh winter after they sought to reduce their reliance on Russian gas amid that country’s invasion of Ukraine.
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