President Trump rescinded the pause on liquified natural gas (LNG) exports within days of his inauguration. The pause had halted new permits to further investigate the environmental and economic effects of industry expansion in the United States.
While the long-awaited Department of Energy study states concerns, it stops short of suggesting curtailing the industry. Trump’s decision to reverse the LNG freeze is a positive move that will reap benefits here and abroad.
Non-existent just a decade ago, LNG has swelled into a multi-billion-dollar industry that engages 55 countries, with new markets opening annually. The global market was valued at $135.21 billion in 2023 and is likely to reach $284.10 billion by 2032. U.S. LNG has contributed $408 billion to our GDP and supported 273,000 jobs. As the world’s top exporter of LNG, we provide one-fifth of global supply and are on track to own one-third of the market share within 10 years. LNG is the fastest-growing industry for U.S. exports.
LNG’s tremendous growth is expected to contribute $1.3 trillion to GDP, $2.5 trillion in revenues for U.S. businesses, $900 billion in expenditures, and $165 billion in tax revenues while supporting 500,000 U.S. jobs.
Natural gas supplies are plentiful and continue to expand. We sit on 691 trillion cubic feet in reserves, equivalent to 86 years’ worth of natural gas. The U.S. Energy Information Agency predicts these figures will keep growing due to improved seismic imaging and drilling techniques that allow for more accurate detection and extraction in previously inaccessible areas.
Environmental considerations are appropriate, and we should do all we can to minimize adverse effects. The liquefaction process and LNG transport do incur methane leaks. However, methane emissions have fallen 70 percent in natural gas distribution systems and 35 percent in transmission and storage since 1990 — despite booming demand. Increased investments in pipeline infrastructure and transit have reduced leaks and will continue improving how natural gas is processed, stored and shipped. Innovation will continue to enhance operations.
The DOE study observes a slight increase in emissions under certain scenarios. Still, those bumps are minimal compared to the advantages natural gas usage brings. By replacing coal with natural gas, cumulative carbon-dioxide emissions have dropped 62 percent over the last three decades. If sufficient cost-effective natural gas is unavailable, many countries will return to coal. Had the pause not been lifted, some studies estimate the switch back to heavier pollutants would increase emissions by 100 million tons, or the equivalence to more than 20 million cars driven annually.
U.S. LNG was pivotal in supplying European nations with much-needed natural gas when war broke out between Russia and Ukraine. As their supplies from Russia dwindled, resulting in price hikes, the U.S. provided energy security to our allies by filling in the gap.
As developing nations continue to industrialize and improve their standard of living, more energy is required to manage the growing infrastructure. Natural gas is a crucial part of that equation. Twenty-three percent of U.S. LNG exports are shipped to burgeoning societies, providing affordable, reliable, and, often, cleaner energy.
When the World Economic Forum met last month, LNG was highlighted as a critical source that more countries are embracing to secure their energy. Its unique flexibility makes it a “significant part of a balanced and equitable approach” to meeting demands and transitioning away from heavier polluting fossil fuels.
Despite concerns over domestic price increases for natural gas if LNG export permits are expanded, data and trends suggest this is not necessarily true. EIA reports indicate little variation in natural gas prices between LNG’s exploding growth from 2016 to 2023. This is because production has increased 43 percent since 2015, meeting domestic and foreign demand. The minimal increase outlined in the study is dwarfed by the economic boon projected by the industry.
U.S. LNG provides reliable, affordable and clean energy for many nations while contributing to economic prosperity through industry expansion, tax revenue and job creation. Lifting the ban was a necessary step to unleashing energy abundance.
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Kristen Walker is a policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org or follow us on Twitter @ConsumerPal.