The Biden administration’s long-awaited study on liquefied natural gas (LNG) exports, released by the Department of Energy (DOE) on Tuesday, has sparked controversy over its findings and Energy Secretary Jennifer Granholm’s interpretation of the data. Critics argue that the study misrepresents the economic impact of increased LNG exports, contradicting both historical trends and independent analyses.
The study, published nearly a year after the Biden administration paused LNG export approvals to non-free trade countries, suggests that significant growth in LNG exports could raise domestic natural gas prices. Granholm stated the study shows that “unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30%” and raise annual household costs by more than $100 by 2050.
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However, industry experts and historical data challenge these claims. From 2012 to today, a period marked by rapid expansion of U.S. LNG exports, domestic natural gas prices have declined despite a substantial increase in export volumes, according to data analyzed by the U.S. Chamber of Commerce.
The U.S. natural gas industry has undergone massive growth since the Shale Revolution in the late 2000s, with LNG exports becoming a significant factor only after 2016. Today, the U.S. is the world’s leading LNG exporter and is on track to double Qatar’s export capacity by 2028. Critics argue that the DOE study ignores this historical context, which shows no evidence that increased exports correlate with rising domestic prices.
Granholm herself acknowledged in the report that U.S. natural gas prices have remained “relatively stable” during the rise of the LNG export industry. Despite this concession, she contends that expanding LNG exports in their current form may not be sustainable or advisable.
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Critics also pointed to the administration’s $1 trillion-plus climate initiatives as a primary driver of rising energy costs, which they argue has had a greater impact on consumers than LNG exports.
Independent studies further challenge the DOE’s claims. On the same day as the DOE report, S&P Global released an analysis showing that domestic natural gas prices have not increased despite substantial export growth. The study also projected that the LNG industry could contribute $1.3 trillion to U.S. GDP by 2040 and generate significant tax revenue.
Granholm’s report emphasized sustainability concerns, arguing that a “business-as-usual approach” to LNG exports is not viable.
However, industry analysts highlight that U.S. LNG, which is cleaner than gas from many other major producers, has the potential to displace dirtier fuels like coal in global markets, reducing emissions while maintaining energy reliability.
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As debates over LNG exports continue, the DOE study underscores the tension between the administration’s climate goals and the economic realities of energy markets. While the report raises questions about the long-term implications of LNG expansion, critics argue that its conclusions are undermined by historical data and the administration’s own acknowledgment of stable domestic prices during the export boom.
With the U.S. poised to maintain its position as a global LNG leader, the balance between economic growth, energy security, and environmental sustainability remains a central challenge for policymakers and industry leaders alike.
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