U.S. Energy Department Releases Updated Study to Inform LNG Export Application Review

The U.S. Energy Department on Dec. 17 released an updated study of U.S. liquefied natural gas exports. The department has been assigned responsibility under the Natural Gas Act to assess the public interest of potential LNG exports to nations with which the U.S. does not have a Free Trade Agreement, or non-FTA countries. In January, the department announced a temporary pause on pending applications for the export of liquefied natural gas to non-FTA countries while it updates the criteria used to determine whether additional export authorizations are in the public interest.

The 2024 LNG Export Study: Energy, Economic, and Environmental Assessment of U.S. LNG Exports aims to provide an updated overview of the probable impacts of U.S. LNG exports on the domestic economy, U.S. households, communities that live in close proximity to areas where natural gas is produced or exported; domestic and international energy security, including impacts on U.S. trading partners; and the climate and environment.

The department’s updated study finds that a wide range of natural gas domestic consumers would face higher prices from increased exports. The study finds that unregulated exports of LNG would increase wholesale domestic natural gas prices by more than 30 percent and could increase costs for the average U.S. consumer by more than $100 per year by 2050. Moreover, the study finds that from 2020 to 2050, the overall energy costs for the industrial sector would increase by $125 billion, leading to additional potential price increases for a wide range of consumer items.

The study also highlights that emissions connected with LNG can vary widely from the point of extraction, through midstream transportation and liquefaction, to end use. Accounting for the GHG intensity of LNG cargoes should be a key  talking point for future operations of the department’s program and of global LNG trade.

The U.S. LNG export sector has witnessed significant growth over the last 10 years. The department has authorized 48 billion cubic feet per day (Bcf/d) of natural gas for export since 2016. Of this 48 Bcf/day in total approved exports, 14 Bcf/d of associated capacity is currently operational, making the U.S. the largest exporter of LNG in the globe. An additional 12 Bcf/d is under construction and projected to double current export volumes by 2030, and a further 22 Bcf/d of capacity exports has been approved by the department, but has not secured a final investment verdict to start construction.

The U.S. exported more LNG compared to any other nation in 2023. U.S. LNG exports averaged 11.9 Bcf/d during 2023, up 12 percent from the previous year. The utilization of U.S. LNG export capacity averaged 104 percent of nominal capacity and 85 percent of peak capacity across the seven U.S. LNG terminals operating in 2023. The region receiving the highest volumes of U.S. LNG in 2023 was Europe, which accounted for 66 percent of total U.S. LNG exports, followed by Asia at 26 percent and Latin America and the Middle East with a combined eight percent.

The comment period will begin upon publication in the Federal Register and extend for a 60-day period.