The future of America’s natural gas exports faces significant uncertainty following a federal government report indicating that unrestricted expansion could harm domestic consumers and impede global climate initiatives.
The Department of Energy’s comprehensive study, released on Tuesday, revealed that continued industry growth could result in a substantial 30% increase in wholesale domestic natural gas prices by 2050, translating to annual household energy bill increases exceeding $122.
Energy Secretary Jennifer Granholm emphasised that maintaining current expansion trajectories would be unsustainable, stating that whilst increased exports would benefit the LNG industry, American consumers, communities, and climate objectives would bear considerable costs.
The US LNG sector has witnessed remarkable growth since its inception less than a decade ago, particularly accelerated by European demand following Russia’s invasion of Ukraine. The nation emerged as the world’s leading LNG exporter in 2023, delivering 11.9 billion cubic feet daily, sufficient to meet the combined gas requirements of Germany and France.
The study’s findings challenge industry assertions regarding environmental benefits, suggesting that additional US LNG exports would predominantly displace renewable energy sources rather than coal globally. Direct emissions from the sector could reach 1.5 gigatonnes annually by 2050, approximately one-quarter of current US emissions.
The American Petroleum Institute has contested the report’s conclusions, advocating for an end to what they term a “politically motivated pause” on LNG permits. Environmental organisations, however, view the study as validation of their concerns regarding the industry’s rapid expansion and its environmental impact.
The report also raises significant concerns about energy security implications, with Secretary Granholm noting that expanded exports would increasingly benefit geopolitical rivals such as China, predicted to become the world’s largest LNG importer through 2050.
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