WASHINGTON – The United States should proceed cautiously as officials consider new natural gas export terminals, Energy Secretary Jennifer Granholm said Tuesday, warning the incoming Trump administration that “unfettered exports" of liquefied natural gas, or LNG, could drive up domestic prices 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 wholesale prices and frequently displace renewable energy sources such as wind and solar power.
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Increased LNG exports also would lead to higher global greenhouse gas emissions, even with use of newly developed equipment to capture and store carbon emissions, the report said.
“Unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30%,'' costing American households an additional $100 a year by 2050, Granholm said
“We have recently lived through the real-world ripple effects of increased energy prices domestically and globally since the (COVID-19) pandemic, she said, adding that an “export-induced price increase” would make it harder for some families to meet basic needs.
“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.
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 the Energy Department recently said it won't decide on two major LNG export projects in Louisiana until the independent Federal Energy Regulatory Commission completes environmental reviews.
Trump's transition team declined direct comment on the study, but said Trump “will make America energy dominant again" and protect U.S. energy jobs after four years of “war on American energy" under President Joe Biden.
“Voters re-elected President Trump by a resounding margin, giving him a mandate to implement the promises he made on the campaign trail, including lowering energy costs for consumers,'' said spokeswoman Karoline Leavitt.
Still, the study could hinder Trump’s plans to immediately greenlight projects to export LNG. Trump said last week that anyone making a $1 billion investment in the United States “will receive fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals."
Environmentalists have said they will use the DOE analysis in lawsuits expected over any Trump administration approvals of LNG projects. Activists decry the multi-billion dollar export terminals as “climate bombs.”
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 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.
The DOE report came as an independent analysis found that increased LNG exports would support nearly half a million domestic jobs and contribute $1.3 trillion to U.S. gross domestic product through 2040. The study, released Tuesday by the research firm S&P Global, projects that U.S. LNG export capacity will double over the next five years, with little impact on domestic prices.
“The emergence of the U.S. LNG industry has placed the United States in the pole position with global demand for gas expected to grow through 2040, alongside the rapid growth of renewables,” said Daniel Yergin, the group's vice chairman and a Pulitzer Prize-winning author.
U.S. LNG “remains a vital tool for countries looking to displace dirtier fuels" such as coal, said Charlie Riedl, executive director of the Center for LNG, a pro-industry group. U.S. gas shipments to Europe and Asia have soared since Russia’s invasion of Ukraine in 2022.
The LNG pause, announced by 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.
Environmental groups hailed the DOE study, saying it found clear evidence of LNG’s climate, economic, national security and public health dangers.
“This study confirms that Donald Trump’s plans to supercharge LNG exports will come at the expense of consumers and the climate," said Raena Garcia, senior energy campaigner at Friends of the Earth. She urged Biden and Granholm to reject all pending LNG projects as against the public interest.
“If Trump wants to drive up dangerous gas exports, he’s going to have to answer for causing more deadly storms, condemning the Rice’s whale to extinction and socking consumers with higher costs,” said Lauren Parker, an attorney at the Center for Biological Diversity, another environmental group.
Parker's comment refers to an endangered whale species in the Gulf of Mexico. Environmentalists say offshore drilling for oil and gas threatens the species' habitat.