Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Climate

The Long-Awaited LNG Study Is Out

And the predictable battle lines are already being drawn.

LNG transport.
Heatmap Illustration/Getty Images

The Department of Energy on Tuesday published the results of its long-awaited analysis of the economic and environmental implications of expanding U.S. exports of liquified natural gas. The study was the culmination of a year-long process after President Biden paused approvals of new LNG export terminals in January so that the agency could update the underlying assumptions it uses to determine whether new facilities are in the “public interest.”

Though the resulting assessment stops short of advising against approving new projects, it finds that additional U.S. LNG export terminals beyond what has already been approved would likely raise natural gas prices for U.S. consumers and increase global greenhouse gas emissions.

The main takeaway, according to an accompanying letter penned by the Secretary of Energy Jennifer Granholm, is that “a business-as-usual approach is neither sustainable nor advisable.”

Among its other key findings:

  • LNG projects that have already been approved are likely to produce more than enough natural gas to meet global demand. New facilities that are under construction will nearly double exports by 2030, and exports could double again after that if all the facilities that have been approved, but have not yet reached a final investment decision, end up getting built.
  • Supporting that is the fact that demand for U.S. LNG has flattened in Europe and peaked in Japan, while South Korea’s demand is expected to plateau by 2030. The DOE’s analysis projects that China will be the largest LNG importer through 2050, and notes that entities there have already signed contracts with U.S. LNG export projects.
  • While new LNG terminals will create jobs and revenues, increased exports could also raise wholesale domestic natural gas prices by more than 30% by 2050.
  • In all five scenarios the DOE studied, U.S. LNG exports would increase global net emissions.

Environmental groups celebrated the outcome. “DOE’s analysis confirms the facts we’ve known for years,” Moneen Nasmith, a senior attorney at Earthjustice said in a statement. “Rampant LNG exports drive up energy prices, contribute to the catastrophic effects of climate change, and delay the global transition to truly clean energy.”

But the gas industry was quick to criticize the findings. In a statement, Karen Harbert, the president and CEO of the American Gas Association, accused the Biden administration of attempting to “justify” the president’s earlier pause on approvals. “The contribution of U.S. natural gas to driving down emissions in this country and the potential for lowering global emissions is unquestioned,” she said.

The transition from coal-fired power plants to natural gas was a major driver of emission reductions in the United States over the last decade. But renewable energy is increasingly a competitive alternative. An analysis of the climate impacts from expanding LNG exports must look not just at whether the fuel would displace dirtier options like coal and Russian natural gas, but also at whether it would displace cleaner options like renewables. The answer depends on which countries end up buying it, and how their climate commitments evolve.

As such, any estimation of greenhouse gas emissions from LNG exports is based on assumptions. Under the Department of Energy’s “defined policies” scenario, it found that additional U.S. LNG exports could end up displacing more renewable energy in other countries than coal, without even factoring in countries’ stated commitments to decarbonize. Overall in this scenario, additional exports would lead to an increase of 711 million metric tons of carbon dioxide between now and 2050.

The rapid acceleration of U.S. LNG exports has not had a discernible effect on U.S. natural gas prices to date. But the Department of Energy finds that “unfettered” LNG exports in the future would put upward pressure on domestic natural gas prices and potentially increase energy costs for U.S. consumers by more than $100 per year by 2050.

Biden’s pause on new LNG approvals was technically overturned in July, when a federal judge found that the administration had overstepped its authority. But two major projects still hang in the balance, the Calcasieu Pass 2 LNG Terminal and the Commonwealth LNG Terminal, both of which would be built in coastal Louisiana. Both projects require approvals from the Federal Energy Regulatory Commission before the Department of Energy can issue a public interest determination.

Although the report published Tuesday is “final,” the administration is opening it up for public comment for 60 days, starting today, to ensure that alternative analyses are captured in the public record and can inform decisionmaking going forward.

In that, the gas industry sees an opening. “We look forward to working with the incoming administration to rectify the glaring issues with this study during the public comment period,” Harbert said in her statement.

During the call on Tuesday, Granholm acknowledged that the future is in the next administration’s hands. “We hope that they'll take these facts into account to determine whether additional LNG exports are truly in the best interest of the American people and economy,” she said.

Editor’s note: This story has been updated to reflect more information from the finished report as well as the DOE’s Tuesday call with reporters.

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Politics

Here Are the Grants EPA Has Canceled

The agency provided a list to the Sierra Club, which in turn provided the list to Heatmap.

Lee Zeldin.
Heatmap Illustration/Getty Images

Officials at the Environmental Protection Agency remain closed-lipped about which grants they’ve canceled. Earlier this week, however, the office provided a written list to the Sierra Club in response to a Freedom of Information Act request, which begins to shed light on some of the agency’s actions.

The document shows 49 individual grants that were either “canceled” or prevented from being awarded from January 20 through March 7, which is the day the public information office conducted its search in response to the FOIA request. The grants’ total cumulative value is more than $230 million, although some $30 million appears to have already been paid out to recipients.

Keep reading...Show less
Energy

The New Campaign to Save Renewables: Lower Electricity Bills

Defenders of the Inflation Reduction Act have hit on what they hope will be a persuasive argument for why it should stay.

A leaf and a quarter.
Heatmap Illustration/Getty Images

With the fate of the Inflation Reduction Act and its tax credits for building and producing clean energy hanging in the balance, the law’s supporters have increasingly turned to dollars-and-cents arguments in favor of its preservation. Since the election, industry and research groups have put out a handful of reports making the broad argument that in addition to higher greenhouse gas emissions, taking away these tax credits would mean higher electricity bills.

The American Clean Power Association put out a report in December, authored by the consulting firm ICF, arguing that “energy tax credits will drive $1.9 trillion in growth, creating 13.7 million jobs and delivering 4x return on investment.”

Keep reading...Show less
Green
Politics

AM Briefing: A Letter from EPA Staff

On environmental justice grants, melting glaciers, and Amazon’s carbon credits

EPA Workers Wrote an Anonymous Letter to America
Heatmap Illustration/Getty Images

Current conditions: Severe thunderstorms are expected across the Mississippi Valley this weekend • Storm Martinho pushed Portugal’s wind power generation to “historic maximums” • It’s 62 degrees Fahrenheit, cloudy, and very quiet at Heathrow Airport outside London, where a large fire at an electricity substation forced the international travel hub to close.

THE TOP FIVE

1. Trump issues executive order to expand critical mineral output

President Trump invoked emergency powers Thursday to expand production of critical minerals and reduce the nation’s reliance on other countries. The executive order relies on the Defense Production Act, which “grants the president powers to ensure the nation’s defense by expanding and expediting the supply of materials and services from the domestic industrial base.”

Keep reading...Show less
Yellow