PA Environment Digest Blog: US DOE Releases LNG Gas Export Study: Facilities Already Approved Will Meet Global Demand For Decades; Unfettered Exports Would Increase Domestic Natural Gas Prices; Electricity Prices; Costs To Manufacturers

Tuesday, December 17, 2024

US DOE Releases LNG Gas Export Study: Facilities Already Approved Will Meet Global Demand For Decades; Unfettered Exports Would Increase Domestic Natural Gas Prices; Electricity Prices; Costs To Manufacturers

On December 17, the U.S. Department of Energy released an updated study of U.S. liquefied natural gas (LNG) exports required by Congress under the federal Natural Gas Act to evaluate the public interest of proposed exports to countries with which the United States does not have a Free Trade Agreement.

The study will have a 60-day comment period that will begin once published in the Federal Register.

The public is encouraged to submit comments, which will inform how DOE may apply the study’s findings to its public interest analysis of export applications going forward.

Key Findings

In addition to the study, U.S. Energy Secretary Jennifer M. Granholm released a Secretarial Statement outlining departmental leadership’s perspective on the final study.

Here are some key findings from the Secretary’s statement--

-- Already Approved Facilities Will Meet Demand For Decades: LNG gas export facilities already approved “will be more than sufficient to meet global demand for U.S. LNG for decades to come.” “U.S. LNG exports have already tripled over the past five years, will double again by 2030, and could double yet again under existing authorizations.”

-- Energy Consumers, Manufacturers Will Face Higher Energy Costs: "Unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30%;" increases in electricity prices because natural gas dominates generation. [In Pennsylvania it accounts for 59% of generation capacity. Read more here.]; and increased costs for manufacturers that use natural gas as feedstock.

-- LNG Gas Export Facilities Burden Already Polluted Communities: LNG facilities tend to be concentrated in communities that are being asked to shoulder the additional burden of pollution from increased natural gas production and liquefaction. This comes on top of existing environmental burdens from refining, petrochemical, and other industries already concentrated near these communities. [The proposal to build an LNG export facility in Chester, Delaware County is just one example. Read more here.]

-- Climate Impact Merits Close, Rigorous Analysis: While some tout LNG as a means to reduce the use of coal overseas (and to date that has been the case with some importing countries), the study put forward today shows a world in which additional U.S. LNG exports displace more renewables than coal globally.

-- We Need To Know Where Those Exports Are Headed: “Based on current global demand for LNG, the People’s Republic of China is already the world’s largest importer. Looking ahead, China's LNG exports are expected to nearly double between now and 2030, and China's LNG imports are expected to be the highest of any country through 2050.

PRC entities have already signed several contracts with operating or proposed U.S. LNG projects.

Future authorization decisions of what is in the “public interest” need not be made solely on a binary – yes or no – basis but could be undertaken using a broader framework of requirements for all authorizations.

[Pennsylvania shale gas producers have already said they have a “duty” to supply China-- our economic and military competitor-- with natural gas to reduce greenhouse gas emissions. Read more here.]

“Regardless of what happens in each cycle of elections, the effect of increased energy prices for domestic consumers combined with the negative impacts to local communities and the climate will continue to grow as exports increase.”

“In the decade to come, we will see strong and mounting pressure within our democratic system to ensure that the United States uses its market position in a way that truly advances our national interest and energy security, which must include the needs of American workers, American families, and our responsibility to address the climate crisis.

“In our view, the question is not whether U.S. export policy will be forced to respond to those interests, but when and what that response is.”

Reactions

Alex Bomstein, Executive Director of Clean Air Council, issued the following statement on the LNG study--

"This report should end the discussion: LNG exports are bad for our pocketbooks, bad for the air we breathe, and bad for the safety of our communities.

“Energy independence does not mean shipping America's resources overseas, it means harnessing and storing our abundant solar and wind energy.

“Clean Air Council urges the DOE to apply the study's findings and deny the six pending permits for LNG export facilities."

The findings from this analysis will inform future LNG export authorization decisions by the DOE and hold proposed projects to the strongest-to-date commonsense standards for determining the public impacts of LNG exports.

Moreover, the study provides an important factual basis for arguments to deny permits for unlawful LNG export terminal proposals.

The new analysis will replace the economic and environmental analyses used by the DOE for application decisions, which were published in 2018 and 2019, respectively.

NewsClips:

-- Post-Gazette - Anya Litvak, et al: Expanding Natural Gas Exports Will Increase Prices, Pollution, Report Says

-- Marcellus Shale Gas Coalition Calls For Immediate Lift Of LNG Export Facility Permit Review Ban

-- Financial Times: LNG Gas Export Boost Would Increase Prices, Hurt Climate, US Study Says

-- Reuters: US DOE Releases LNG Gas Export Facility Study Urging Caution On New Permits

-- Bloomberg: US DOE Release LNG Exports Study That Could Hamstring New Republican Administration

-- The Guardian: Biden Administration Advises Caution On New Natural Gas Export Facility Permits After Report

Resource Links:

-- -- PA Marcellus Shale Gas Coalition Doubles-Down On Support For Exporting PA Natural Gas To China, Our Economic, Military Competitor [PaEN]

-- Marcellus Drilling News: ‘Selling Oil And Natural Gas To China?’ ‘It Simply Should Not Happen, Period’ [PaEN]

-- US DOE: China Is Biggest Destination For US LNG Gas Exports; PA Shale Gas Industry Says We Have ‘Duty’ To Export Gas To China, Our Military, Economic Competitor [PaEN]

-- US Senators Introduce Bill To Ban US LNG Gas Sales To Any Entity Under The Control Of Communist China To Protect US Jobs; Americans From Price Spikes; EQT Says We Have A ‘Duty’ To Provide LNG Gas To China; Where Do AMERICAN Interests Lie? [PaEN]