Unleash American energy with liquefied natural gas

OPINION:

Natural gas has transformed America’s energy fortunes — from global energy importer to exporter — delivering reliable energy and lower prices for Americans. Yet last January, the Department of Energy announced an indefinite pause on U.S. liquefied natural gas project approvals to study its impact on climate change, energy security and domestic prices — an exercise that was completed by DOE three times over the last decade.

Despite more than a decade of market evidence and independent analyses that LNG exports benefit economic and environmental security in the United States and worldwide, Energy Secretary Jennifer Granholm recently wrote a memo urging caution on LNG project approvals just weeks before she’s set to leave office.

Here are three reasons the extended LNG “pause” must be lifted, new exports should be authorized and Ms. Granholm’s political spin on the Department of Energy study should be discarded.

First, the Biden administration’s claim that LNG exports could lead to higher prices is inconsistent with federal analysis, studies and historical precedent. Volumes of analysis confirm that LNG exports do not negatively affect domestic gas prices.

According to an S&P report this week, the same people warning that new export licenses will raise domestic prices were also saying so 15 years ago when the first LNG terminals were proposed. Yet the opposite has occurred. Last week, DOE published an analysis showing that U.S. natural gas prices reached all-time lows last year because of abundant resources that feed domestic and global markets.

The U.S. Energy Information Administration, in its 2023 Annual Energy Outlook, found that the continued expansion of U.S. natural gas infrastructure was essential to ensuring continued access to low-cost natural gas.

LNG facilities have brought significant economic benefits to communities nationwide, especially along the Gulf Coast. According to a recent National Association of Manufacturers report, U.S. LNG supported the creation of over 200,000 jobs last year alone.

A prolonged moratorium on new LNG licenses jeopardizes investment to strengthen communities along the Gulf. Notable projects caught in the crosshairs of DOE’s politically motivated pause include Calcasieu Pass 2, Lake Charles LNG, Commonwealth LNG and Port Arthur LNG. S&P Global’s findings conclude that regulatory uncertainty beyond lifting the LNG pause is putting growth at risk, including 100,000 direct and indirect U.S. jobs.

Second, despite Ms. Granholm’s alarmist rhetoric, the DOE report demonstrates environmental benefits — including lower emissions — from U.S. LNG. DOE confirms that U.S. greenhouse gas emissions are declining relative to energy produced, stating that with unfettered LNG export approvals and no added carbon capture technologies assumed (the most extreme growth scenario), emissions would rise by only 0.05% over the next 25 years. Ms. Granholm’s doomsday messaging does not consider any coal or Russian gas displacement by U.S. LNG, which is objectively a cleaner fuel.

Independent academic studies and other government analyses have detailed LNG’s lower carbon benefits. The Department of Energy’s 2019 analysis concluded that the life cycle of greenhouse gas emissions from U.S. LNG is significantly lower than that of both coal and Russian pipeline gas. Nations in Asia and elsewhere are reverting to increased coal use as energy demands grow. Global coal use reached an all-time high in 2023, according to the International Energy Agency, and is set to break the record in 2024, given the prolonged pause by the Biden administration.

Finally, global demand for LNG from the U.S. is increasing, and reliable natural gas supplies in the U.S. can provide greater global stability and security. Ms. Granholm correctly asserts that American LNG “has proven critical for our allies in Europe as they wean themselves off Russian gas.”

Just two years ago, President Biden committed to Europe to send 15 billion cubic meters of U.S. LNG to Europe in the aftermath of Russia’s invasion of Ukraine. Eurogas President Didier Holleaux agrees and recently asserted that DOE’s LNG pause could “spark a new period of price volatility in Europe,” undermining the significant work it took for Europe to slash dependence on Russian gas by two-thirds in the past two years alone.

DOE’s report makes an unsupported claim that European gas demand has flattened and is expected to flatten soon in Japan and South Korea. This claim comes after European Commission President Ursula von der Leyen stated last month that the European Union is looking to replace Russian gas with more LNG imports from the United States. Japan issued a statement the same day as the DOE report, doubling down on its long-term strategy to secure long-term LNG contracts.

Ms. Granholm’s memo also fails to consider energy demand for European data centers. Some estimates suggest a tripling of European data center power demand for computing by 2030, crunching the region’s natural gas supply needs. In South Korea, natural gas demand increased rapidly from 2015 through 2021 (5.6% a year) and has remained stable.

Americans have more than a decade of market evidence that LNG exports provide economic, security and environmental benefits in America and worldwide. The U.S. today is the No. 1 exporter of natural gas — more than 12 billion cubic meters per day. Global demand is projected to keep growing, and the United States is in a unique position to use our abundant natural resources to not only meet this demand but curb U.S. inflation, deliver record-low natural gas prices in America and support our allies overseas in moving to lower-carbon natural gas. It is time to step on the gas and approve critical LNG infrastructure projects for America and allies across the world.

• Megan Bloomgren served as a senior vice president at the American Petroleum Institute from 2017 through 2024 and is a partner at DCI Group.