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These 7 neighborhoods are competing visions of a more sustainable future.
I’m a serial cheater, emotionally, on New York City. As much as Queens is my home, one of my favorite ways to lose track of time is by going down the Zillow rabbit hole and imagining all the other lives I could live somewhere else. If I had $2 million, would I move into a houseboat to live out my Sleepless in Seattle dreams? (You laugh, but at least a floating home is floodproof!). Or maybe I’d go to California to be closer to my extended family? (Never mind — I’d never be able to afford the fire insurance).
Recently I’ve become especially captivated by “intentional communities,” of which there are thousands worldwide and hundreds in the United States alone. These are experimental master-planned neighborhoods that revolve around shared values that often pertain to things like sustainability, communal living, green spaces, and minimizing individual impact — things that might be necessary to adopt in some form on a wider scale in the coming years.
Some of these communal neighborhoods are pretty out there (think aquaponics that runs off a “VillageOS”). Others are so alluring that without even realizing it, I found myself browsing their availability pages. Oops — don’t tell New York.
Here are a few of the innovative neighborhoods that caught my eye:
Location: Utrecht, Netherlands
Courtesy MVSA Architects
You’ve joked about running away to go live in the woods, but what if you didn’t have to make the choice?
Designed by Stefano Boeri of Verticle Forest fame and Roberto Meyer of the Dutch firm MVSA Architects, Wonderwoods is a 200-apartment, two-tower project in Utrecht, the fourth-biggest city in the Netherlands. The pair of structures, set to open in 2024, look in the renderings like something nature has reclaimed. But the 10,000 plants and 300 trees that will eventually cover the buildings’ balconies, roofs, and facades aren’t just there to look cool.
By decking out Wonderwoods in the equivalent of one hectare of forest, the designers aim to maximize the known benefits of urban tree planting: Plants suck up CO2, help filter out environmental pollutants, and can even generate microclimates that will be important in a warming world (the cooling effects of plants will also help reduce the energy demand of air conditioners).
Wonderwoods’ co-designer, Boeri, has been called “perhaps the most famous name in green architecture,” and he is both prolific and influential: The Dutch project is just one of the dozens of plant-coated buildings that have been, or are being, constructed around the world.
Not all of these experiments have been successful — rumor has it the Qiyi City Forest in Chengdu is overgrown and bug infested — and some scientists have downplayed the greenhouse gas-mitigating effects of so-called biophilic design. Still, if we’re to survive in a hotter, more concrete-covered world, we’ll need to bring plants along with us.
Would I live here?: I’ve always been jealous of people who junglefy their living spaces with lots and lots of plants (Hilton Carter, please decorate my home!). Tragically, I don’t always have the greenest thumb — I’m an overenthusiastic waterer — but the good news is, Wonderwoods has a team of rappelling gardeners who will maintain the exterior vegetation for you. Getting to enjoy the lushness of a rural forest in the heart of urban Europe without having to do any of the work? Count me in — I’d live here for sure.
Live, Work & Play at Wonderwoodswww.youtube.com
Location: Tempe, Arizona
Courtesy Culdesac
Forget electric vehicles: Residents of Culdesac, a rental community just across the river from Phoenix in Tempe, Arizona, are “contractually forbidden from parking a vehicle within a quarter-mile radius of the site.”
While that might sound practically un-American to some, it’s a paradise for others. The 17-acre, $170-million project includes 761 apartments, a light rail stop (which is free with residency), communal courtyards, a coffee shop, restaurant, gym, grocery store, soon-to-open coworking space, car-share pick-up and drop-off, and, yes, visitor parking.
Culdesac isn’t the only car-free community in America, as Jalopnik reports. But while the communities tend to be popular, especially with young professionals (40% of the people on Culdesac’s opening waitlist were from outside of Arizona), “these kinds of developments often aren’t legal to build in large parts of the country due to mandatory parking minimums,” Jalopnik adds.
That doesn’t deter its founders. The long-term “vision of Culdesac,” Ryan Johnson, Culdesac’s chief executive, told The New York Times, is to eventually “build the first car-free city in the U.S.”
Would I live here?: One of the biggest deterrents against leaving New York City is being saddled with car payments — not to mention that my husband doesn’t drive. Despite being located in the heart of the Phoenix sprawl, Culdesac seems genuinely committed to making a car-free lifestyle work for its residents, offering benefits like free rides on the metro, bike parking, $5-an-hour car-sharing, complimentary Lyft Pink, and rentable Bird scooters on site. Coming from the New York real estate market, its prices also seem reasonable — available one-bedroom units start at $1,390 a month. I know because I was tempted enough to look. If only I liked the heat a little more …
Culdesac Tempe: The First Car-free Community Built From Scratch in the USwww.youtube.com
Location: Vienna, Austria
Anja Pfeifer/Getty Images
Vienna is one of the fastest-growing cities in Europe, which has created a massive demand for housing. In order to meet the demand, Vienna is building a city within a city — and taking it as an opportunity to do things right.
With over 11,000 new homes (including the world’s second-tallest timber building), the neighborhood of Aspern Seestadt is nearly net-zero, relying on technology and cutting-edge construction techniques to lower its footprint. Excess heat and electricity in one building can be sent to another, for example, while 80% of its residents reportedly travel by bike, foot, or public transit.
But what sets Aspern Seestadt apart from other green, pedestrian-friendly communities around the globe is its emphasis on centering women’s and families’ needs. For one thing, all of the streets and public spaces in the neighborhood are named after women, but the attention goes beyond the symbolic — the pavement is also wide to accommodate strollers, and ramps are included alongside staircases; parks and other gathering spaces have plentiful public toilets; pram parking and storage are readily accessible. There are also extra safety measures, like more lights in dark spaces, abundant alarms and assistance buttons, and extra guards during nighttime hours.
Buildings in Aspern Seestadt also mix housing with nurseries, shops, and coworking spaces so “women, as well as men, can … better reconcile professional and personal life,” Germany’s Gettotext.com reports. It’s a model more intentional communities should take note of.
Would I live here?:Vienna has repeatedly been cited as the city with the highest quality of life in the world although the picture might not be as rosy if you aren’t Austrian. The expat resource website InterNations lists Vienna as the “worst-rated city” in the world when it comes to the “ease of settling in” due in large part to it also being in last place for “local friendliness.” As amazing as it’d be to be integrated into a community like Aspern Seestadt — especially, eventually, as a mother — it’d probably be terribly isolating to get the cold shoulder from my new neighbors. For the “new girl in the high school” vibes this is giving me, I’d potentially pass.
Vienna is Building a $6BN "City Within a City"www.youtube.com
Location: Barcelona, Spain
Pol Albarran/Getty Images
One of the major criticisms of intentional communities is that they’re not actually all that “green” since they require new construction, which in turn uses up resources and adds to emissions. Additionally, many of the neighborhoods featured in this article simply aren’t scaleable to the necessary degree; 4.4 billion people live in cities and moving all of them into net-zero villages or buildings would be next to impossible.
But what if existing neighborhoods could retroactively be made greener and more habitable? That’s the radical idea behind Barcelona’s superilles, or superblocks, which began reclaiming city streets for pedestrians back in 2013. The basic idea involves cordoning off 3x3 city blocks, diverting thru-traffic around the “islands,” and limiting the roads within the blocks to six-mile-per-hour residential traffic. This transforms the interiors of the superblocks into safe places for pedestrians to walk and kids to play; the new green spaces help eliminate the urban heat island effect and boost mental health; and the walkability encourages increased foot traffic, in turn reducing emissions.
The experiment has been an enormous success: NO2 pollution has dropped 33%; noise in superblocks dipped by 9 decibels, and local businesses have seen increased sales as residents opt to shop within walking distance, a positive illustration of the urban planning concept known as the 15-minute city.
Today, there are only six superblocks in the capital of Catalonia, but the goal is to expand the concept city-wide to potentially as many as 500. In the next decade, it aims for every resident to have a public square and a green street within 650 feet of their home.
Would I live here?:Psst, New York City, can’t you take a hint? The COVID-19 pandemic gave New Yorkers a taste of what it might be like if our city prioritized the needs of pedestrians over drivers with its “open streets” program, although most of that progress has been rolled back. Barcelona is proving we could be better if only we had our priorities in the right place. Sure, it’s a sí from me when it comes to moving to Spain, but it’d be even neater if we could bring the superblock experiment back home.
Superblocks: How Barcelona is taking city streets back from carswww.youtube.com
Location: Near Amsterdam, Netherlands
Courtesy ReGen
“The Tesla of Eco-Villages” might not sound quite as appealing as it once did. But if you want to live minimally but aren’t quite ready to give up your Apple Watch, then ReGen Villages might be for you.
While other projects I've highlighted reimagine urban living, ReGen Villages wants to reinvent the “neighborhood development outside of cities.” The 50-acre community of 300 homes is planned for a rural region about a half-hour drive outside of Amsterdam and aims to combine vertical farming, aquaponics, renewable energy, and waste-to-resource systems to form an almost entirely self-sustaining, closed-loop community.
But this isn’t your hippie aunt’s crunchy, off-the-grid living. Conducting the complicated system will be the “Village OS” software, which eventually will use AI to “optimize living conditions, energy use, and overall efficiency,” and even potentially communicate with other future ReGen Villages around the planet, Insider reports.
ReGen Village has run into a number of roadblocks since it was first announced — construction on the complex was originally slated to begin in 2017 but it has encountered zoning, permitting, and funding problems and its website says the company is “in [the] process of raising a Series-A round of investment” to build out the operating system to test in “pilot communities.” But if the Amsterdam location doesn’t work out, stay tuned; ReGen is a California-based company and it reports interest in the concept is high in the U.S., particularly the Northeast.
Would I live here?: I’m all for off-the-grid living but something about ReGen Villages feels a little … cult-y? Maybe it’s the all-seeing AI, or the active discouragement of owning a car while living in a rural area, but something about this whole scheme sounds like the starting premise of an Ari Aster film. I’ll keep my cell reception, thanks.
ReGen Villages - Index Award 2017 Finalistwww.youtube.com
Location: Dubai, United Arab Emirates
Screenshot/YouTube
A desert oil state might seem like an unlikely place for a sustainable city; in 2003, the United Arab Emirates had the highest ecological footprint per person of any nation (and it’s not much better now). But as part of a region-wide effort to convince the rest of the world that climate objectives are compatible with fossil fuels, the UAE is hosting COP28 and touting lofty goals like making Dubai the city with the smallest carbon footprint in the world by 2050.
The 120-acre, $354 million Sustainable City is one of the crown jewels of that ongoing effort. Constructed 18 miles in the desert outside of Dubai by Diamond Developers, which built the city’s famous marina, the Sustainable City is intended as a model net-zero neighborhood, complete with self-sufficient greenhouses and biodomes, recycled water, solar panels, and intelligent design (the villas, home to some 2,500 residents, all face north, which the developers claim cuts air conditioning usage by 40%). Cars are banned inside the compound and a shopping plaza, complete with a mosque, serves all the residents’ needs.
Critics are highly skeptical of the Sustainable City, arguing the project is an “‘island’ of specialized consumption and lifestyle … that does not actually take on the challenge of sustainability.” Supporters, on the other hand, describe it as a “living laboratory” where developers are learning in real-time how to make habitable one of the most climate-threatened places on Earth. True, the Sustainable City might not be the solution to Dubai’s problems — at worst, it might represent another instance of the UAE’s greenwashing. But if its experiment is successful, the solutions it discovers could help inform better-living for everyone.
Would I live here?:There is a reason most of the homes on this list are variations on high-density living; dense urban housing tends to be far more energy efficient. While having your own villa in the Sustainable City would be pretty sweet, it does give the impression that this is just another gated community surrounded by all the other gated communities also touting their green bona fides in Dubai. On top of the human rights violations I’d have to turn a blind eye to in order to live in the United Arab Emirates, I’m not sure the Sustainable City would be right for me.
Sustainable City | Fully Chargedwww.youtube.comSc
Location: Austin, Texas
Screenshot/YouTube
Bringing people in closer harmony with the Earth is the goal of many sustainable communities. Whisper Valley, a 2,000-acre development in Austin, just takes it a little more literally.
At first, Whisper Valley looks like many innovative developments popping up across America: The 7,700 homes come with solar panels, Google Nest thermostats, nearby community centers, and ample public green spaces (in this case, a massive 600-acre park that doubles as flood control). But what sets the community apart is what you can’t see: Whisper Valley sits on the largest geothermal grid in the world.
Drawing on the steady temperature of the deep Earth, geothermal is gaining popularity as a means of slashing energy costs and emissions associated with heating and cooling homes. In combination with solar panels, monthly energy bills in Whisper Valley run residents only about one dollar.
But the low energy impact and savings are not the only things that make Whisper Valley a model neighborhood for the future. Because of its reliance on geothermal energy, the community had no problem staying warm when a 2021 energy surge during the deadly Texas Snowpocalypse left millions of people without heat for days. “As extreme weather gets more destructive,” Fast Company writes, geothermal solutions like that in Whisper Valley may be “a way for communities to withstand their own version of Snowpocalypse.”
Would I live here?: The suburbanite in me loves a lot about Whisper Valley — the stand-alone energy-efficient homes, the communal gathering spaces, the emphasis on healthy outdoor-oriented lifestyles, and the charging stations that come already installed in the garages. For most Americans, the development likely represents a feasible way to lower the family footprint while not compromising on many of the things we’ve come to take for granted, such as having our own space and the freedom that comes with owning a car. As far as daydreams go, Whisper Valley is perhaps a little underwhelming compared to living in a sky-forest or a luxury villa. But in terms of places that real Americans might actually be convinced to live, Whisper Valley is as exciting as it gets.
Whisper Valley - East Austin's New Zero-Energy Capable Communitywww.youtube.com
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Tax credit transferability is a wonky concept, but it’s been a superpower for clean energy developers.
One of the most powerful innovations in the Inflation Reduction Act was a new vehicle to finance clean energy projects. In addition to expanding the nation’s tax credits for climate-friendly projects, Congress gave developers freedom to sell these credits for cash. If a battery factory couldn’t take full advantage of the tax credits itself, it could transfer them to someone else who could.
Now, Republicans on the House Ways and Means Committee have proposed getting rid of this “transferability” provision as part of a larger overhaul of the tax credits. A draft bill published on Monday would end the practice starting in 2028.
Nixing transferability isn’t the bill’s most damaging blow to clean energy — new sourcing requirements for the tax credits and deadlines that block early-stage projects pose a bigger threat. But the ripple effects from the change would permeate all aspects of the clean energy economy. At a minimum, it would make energy more expensive by making the tax credits harder to monetize. It would also all but shut nuclear plants out of the subsidies altogether.
Prior to the passage of the Inflation Reduction Act, if renewable energy developers with low tax liability wanted to monetize existing tax credits, they had to seek partnerships with tax equity investors. The investor, usually a major bank, would provide upfront capital for a project in exchange for partial ownership and a claim to its tax benefits. These were complicated deals that involved extensive legal review and the formation of new limited liability corporations, and therefore weren’t a viable option for smaller projects like community solar farms.
When the 2022 climate law introduced transferability across all the clean energy tax credits, it simplified project finance and channeled new capital into the clean energy economy. Suddenly, developers for all kinds of clean energy projects could simply sell their tax credits for cash on the open market to anyone that wanted to buy them, without ceding any ownership. The tax credit marketplace Crux estimated that a total of $30 billion in transfers took place last year, only about 30% of which were traditional tax equity deals. In the past, tax equity transfers have topped out at around $20 billion per year.
Schneider Electric, which has long helped corporate clients make power purchase agreements, now facilitates tax credit transfers, as well. The company recently announced that it had closed 18 deals worth $1.7 billion in tax credit transfers since late 2023. The buyers were all new to the market — none had directly financed clean energy before the IRA, Erin Decker, the senior director of renewable energy and carbon advisory services, told me.
It turns out, buying clean energy tax credits is a win-win for brands with sustainability commitments, which can reduce their tax liability while also helping to reduce emissions. Some companies have even used the savings they got through the tax credits to fund decarbonization efforts within their own operations, Decker said.
By simplifying project finance, and creating more competition for tax credit sales, transferability also made developing renewable energy projects cheaper. Developers of wind and solar farms have been able to secure upwards of 95 cents on the dollar for transferred tax credits, compared to just 85 to 90 cents for tax equity transactions. The savings go directly to utility customers.
“State regulators require electric companies to pass the benefits of tax credits through to customers in the form of lower rates,” the Edison Electric Institute wrote in a policy brief on the provision. “If transferability were repealed, electric companies once again would rely on big banks to invest in tax equity transactions, ultimately reducing the value of the credit that flows directly through to customers.”
Many of the companies that can’t count on tax equity deals will still have other options under the GOP proposal. Tax-exempt entities, like rural electric cooperatives and community solar nonprofits, can use “elective pay,” another IRA innovation that allows them to claim the credits as a direct cash payment from the IRS. For-profit companies developing carbon capture and advanced manufacturing projects also have the option to use elective pay for the first five years they operate. All of this raises questions about whether axing transferability would furnish the government with meaningful savings to offset Trump’s tax cuts.
But the bigger danger for Trump would be his nuclear agenda. Prior to the IRA, low power prices meant that many nuclear operators couldn’t afford to extend the licenses on their existing plants, even ones that had many years of useful life left in them. The IRA created a new tax credit for existing nuclear plants that made it economical for operators to invest in keeping these online, and even helped bring some, like the Palisades plant in Michigan, back from the dead.
This wouldn’t have worked without transferability, Benton Arnett, the senior director of markets and policy at the Nuclear Energy Institute, told me. Going forward, finding a tax equity partner would be nearly impossible because of the unique rules governing nuclear plants. Federal regulations require that the owners of a nuclear power plant be listed on its license, so bringing on a new owner means doing a license amendment — a headache-inducing process that banks simply don’t want to take on. “We’ve had members reach out to tax equity groups in the past and there was very little interest,” Arnett said
While a few plant owners might have enough tax appetite to benefit from credits directly, most have depreciating assets on their books that greatly reduce their liability. “Without transferability, for many of our members, it’s very difficult for them to actually monetize those credits,” said Arnett. “In a way, nuclear is disproportionately impacted by removing that ability to transfer.”
In February, Secretary of Energy Chris Wright declared that “the long-awaited American nuclear renaissance must launch during President Trump’s administration.” But so far on Trump’s watch, between the proposed loss of transferability and early phase-out of nuclear tax credits, plus cuts to loan programs at the Department of Energy, we’ve only seen policies that would kill the nuclear renaissance.
On Trump’s Gulf trip, budget negotiations, and a uranium mine
Current conditions: Highs in Dallas, San Antonio, and Austin could break 100 degrees Fahrenheit on Wednesday afternoon, with ERCOT anticipating demand could approach August 2023’s all-time high of 85,500 megawatts • Governor Tim Walz has called in the National Guard to respond to three fires in northern Minnesota that have burned 20,000 acres and are still 0% contained• The coldest place in the world right now is the South Pole of Antarctica, which could drop to -70 degrees tomorrow.
Win McNamee/Getty Images
The White House on Tuesday announced a $600 billion investment commitment from Saudi Arabia during President Trump’s trip to the Gulf. In exchange, the U.S. offered Riyadh “the largest defense cooperation agreement” Washington has ever made, with an arms package worth nearly $142 billion, Reuters reports. The deals announced so far by the White House total just $283 billion, although the administration told The New York Times that more would be forthcoming.
Among the known commitments in the health and tech sectors, the U.S. also reached a number of energy deals with Saudi Arabia’s state-owned oil company, Aramco, which agreed to a $3.4 billion expansion of the Motive refinery in Texas “to integrate chemicals production,” OilPrice.com reports. Aramco additionally signed “a memorandum of understanding with [the U.S. utility] Sempra to receive about 6.2 million tons per year of LNG.” (Aramco is responsible for over 4% of the planet’s CO2 emissions, according to the think tank InfluenceMap, and would be the fourth largest polluter after China, the U.S., and India, if it were its own country.) Additionally, Saudi company DataVolt committed to invest $20 billion in AI data centers and energy infrastructure in the U.S.
Senate Republicans are reportedly putting the brakes on the House Ways and Means Committee’s proposal to overhaul the nation’s clean energy tax credits and effectively kill the Inflation Reduction Act. “[S]ome Senate Republicans say abruptly cutting off credits and changing key provisions that help fund projects more quickly could stifle investments in energy technologies needed to meet growing power demand, and lead to job losses for manufacturing and electricity projects in their states and districts,” Politico reports. North Dakota’s Republican Senator John Hoeven, for one, characterized the Ways and Means’ plan as a “starting point,” with “some change” expected before agreement is reached.
As my colleague Emily Pontecorvo reported earlier this week, the House proposal “appears to amount to a back-door full repeal” of the IRA, including cutting the EV tax credit, moving up the phase-out of tech-neutral clean power, and eliminating credits for energy efficiency, heat pumps, and solar. But as she noted then, “there’s a lot that could change before we get to a final budget” — especially if Republican senators follow through on their words.
The Interior Department plans to expedite permitting for a uranium mine in Utah, conducting an environmental assessment that typically takes a year in just 14 days, The New York Times reports. Interior Secretary Doug Burgum said the fast-track addressed the “alarming energy emergency because of the prior administration’s Climate Extremist policies.” Notably, Burgum also recently issued a stop-work order on Equinor’s fully permitted Empire Wind offshore wind project, claiming the project’s permitting process had been rushed under former President Joe Biden. That process took nearly four years, according to BloomberNEF.
Critics of the Velvet-Wood project in San Juan County, Utah, said the Interior Department is leaving no opportunity for public comment, and that there are concerns about radioactive waste from the mining activities. Uranium is a fuel in nuclear power plants, and its extraction falls under President Trump’s recent executive order to address the so-called “national energy emergency.”
Clean energy investment saw a second quarterly decline at the start of 2025, but nevertheless accounted for 4.7% of total private investment in structures, equipment, and durable consumer goods in the first quarter of the year, a new report by the Rhodium Group’s Clean Investment Monitor found. Among some of its other notable findings:
You can read the full report here.
A Dutch environmental group is suing oil giant Shell, arguing that the company is in violation of a court order to make an “appropriate contribution” to the goals of the Paris Climate Agreement, France 24 reports. Amsterdam-based Milieudefensie previously won an historic precedent against Royal Dutch Shell in 2021, with the court ruling the company had to cut its carbon emissions by 45% of 2019 levels by 2030 because its investments in oil and gas were “endangering human rights and lives.” Shell appealed the decision, moved its headquarters to London, and dropped “Royal Dutch” from its name; subsequently, a Dutch appeals court sided with Shell and reversed the 45% emissions reduction target, while still insisting the company had a responsibility to lower its emissions, Inside Climate News reports.
Now, Milieudefensie is suing, claiming Shell is in breach of its obligation to reduce emissions due to its “continued investment in new oil and gas fields and its inadequate climate policy for the period 2030 to 2050.” Sjoukje van Oosterhout, a lead researcher on the Shell case for Milieudefensie, said in a press conference, “The impact of this case could really be enormous. Science is clear, crystal clear, and the ruling of the appeals court was also clear. Every new field is one too many. That’s why we have this case today.”
AstraZeneca
UK regulators this week approved the use of AstraZeneca’s new medical inhaler, which uses a propellant with 99.9% lower global warming potential than those currently in use. The U.S. Environmental Protection Agency has estimated that the discharge and leakage of planet-warming hydrofluoroalkane propellants from inhalers was responsible for 2.5 million metric tons of CO2 equivalents in 2020, or about the same emissions as 550,000 passenger vehicles driven for one year.
Tuesday’s encouraging inflation data concealed an ominous warning sign.
The Trump administration’s policy of increased natural gas exports abroad, plus increased industrial and artificial intelligence investment at home, plus cuts to green energy tax credits could add up to more energy price volatility for Americans.
On Monday, the House Ways and Means Committee unveiled its plan for deep cuts to the Inflation Reduction Act, including early expiration dates and restrictions on the core clean energy tax credits that would effectively gut America’s signature climate law.
But Tuesday’s good news about inflation also contained a troubling omen for electricity prices.
Overall, prices are rising at their slowest rate in years. The Bureau of Labor Statistics reported that overall prices have risen 2.3% in the past year, the slowest annual increase since February 2021. But electricity prices were up 0.8% just in the past month, and were up 3.6% over last year.
This is likely due in part to rising natural gas prices, as natural gas provides the better part of American electricity generation.
The benchmark Henry Hub spot price for natural gas was $3.26 per million British thermal unit last week,according to the latest Energy Information Administration data — around twice the price of a year ago. And there’s reason to think prices for both gas and electricity will continue to rise, or at least be vulnerable to spikes, explained Skanda Amarnath, the executive director of Employ America.
European demand for liquified natural gas has been high recently, which helps pull the American natural gas price closer to a global price, as Europe is a major buyer of U.S. LNG.
During the early years of the shale boom in the 2010s, before the United States had built much natural gas export capacity (the first LNG shipment from the continental United States left Louisiana in early 2016, believe it or not), American natural gas consumers benefited from “true natural gas abundance,” Amarnath told me. “We had this abundance of natural gas and no way for it to get out.”
Those days are now over. The Trump administration has been promoting LNG exports from day one to a gas-hungry global economy. “We’re not the only country that wants natural gas, and LNG always pays a premium,” Amarnath said.
In March, Western European gas imports hit their highest level since 2017, according to Bloomberg. And there’s reason to expect LNG exports will continue at that pace, or even pick up. One of the Trump administration’s first energy policy actions was to reverse the Biden-era pause on permitting new LNG terminals, and Secretary of Energy Chris Wright has issued a number of approvals and permits for new LNG export terminals since.
The EIA last week bumped up its forecast for natural gas prices for this year and next, citing both higher domestic natural gas demand and higher exports than initially expected. And those are in addition to all the structural factors in the United States pulling on electricity demand — and therefore natural gas demand — including the rise in data center development and the boom in new manufacturing.
But we’re in the era of “drill, baby, drill,” right? So all that new demand will be met with more supply? Not so fast.
Increased production of oil overseas — pushed for by Trump — is playing havoc with the economics of America’s oil and gas companies, which are starting tolevel off or even decrease production. The threat of an economic slowdown induced by Trump’s tariffs also influenced some of those decisions, though that fear may have eased with the U.S.-China trade deal announced on Monday.
While it’s the price of oil that largely determines investment decisions for these companies, a consequence can be fluctuations in natural gas production. That’s because much of America’s natural gas comes out of oil wells, so when oil wells go unexploited, natural gas stays in the ground, too.
“A drop in crude oil prices over the past three months has reduced our expectations for U.S. crude oil production growth, and we now expect less associated natural gas production than we did in January,” the EIA wrote last week.
“Together, these factors mean we expect natural gas prices will be higher in order to incentivize production and keep markets balanced.”
At the same time, Republicans in Congress and the Trump administration look to choke off policy support for a boom in renewables investment with their planned dismantling of the Inflation Reduction Act. This means a less diversified grid that will be more reliant on natural gas, Amarnath explained.
When natural gas prices spike, “it’s very useful to have non-gas sources of supply,” Amarnath told me. The alternative fuel can be anything as long as it’s not fossil. It can be solar, it can be wind, it can be nuclear — all three of which would be hammered by the IRA cuts.
What these sources of power do — besides reduce greenhouse gas emissions — is diversify the grid, so that America’s electricity consumers are “not held hostage to what Asian or European LNG buyers want to pay,” Amarnath said.
“The less you rely on a fuel source for electricity, the more stable you are from a price spike. And we’re more at risk now.”