Here we go again.
A highly anticipated “study” from the U.S. Department of Energy on liquefied natural gas (#LNG) exports – supposedly the basis for the White House’s ready-fire-aim strategy to pause new permits, which they rolled out a year ago – will embrace the widely discredited notion that expanding LNG exports will cause domestic #naturalgas prices to spike, at least according to reporting out today from Politico and Reuters.
In many parts of the #energy sector, there is a wide berth of interpretation. What is affordable energy? What does reliability really mean? What energy mix makes us the most energy secure?
This isn’t one of those cases.
We have a decade of data showing that surging LNG exports have not caused any price spikes. Also, because the Internet is forever, we can see countless examples in the past of export critics assuring us in glossy reports and high-profile op-eds that exports would raise prices for consumers.
That didn't happen. We know it didn’t happen. And now that politicians are making literally the same argument again… well, we know better.
Let’s roll the tape.
In February 2012, then-Rep. Ed Markey (D-Mass) wrote in The Hill that “industry’s plans” to export 18% of the U.S. natural gas supply “could spike U.S. prices by more than 50 percent.” Ironically, he cited a study from the U.S. Department of Energy for his warning.
The same month Markey wrote that, U.S. natural gas prices were $2.51/mmBTU. In February 2024, U.S. natural gas prices were $1.72/mmBTU. Instead of increasing 50%, prices declined by 31%.
In 2023, total natural gas exports were approximately 17% of total U.S. production – so essentially the same volume that critics alleged would cause prices to do the exact opposite of what they did.
But wait, there’s more.
Critics have long claimed that exports would reduce industrial competitiveness because they would drive up domestic energy prices. From 2010 to 2022, chemical manufacturers invested over $200 billion in the United States to take advantage of – you guessed it – affordable natural gas.
In 2015, the Center for American Progress warned that exporting large volumes of LNG “could increase annual natural gas bills for residential, commercial, and industrial consumers by at least $7 billion per year by 2020.” From 2015 to 2020, U.S. natural gas prices declined 32%.
In January 2022, a Washington Post headline warned: “Europe wants American natural gas. That could drive up U.S. prices.” In January 2024, U.S. LNG exports had increased 12% since that headline was written, and domestic prices had declined 27%.
If natural gas exports caused price spikes, then how did the United States go from exporting essentially zero LNG to becoming the world’s largest exporter in less than a decade, while domestic prices remained flat?
Again, we have the data. We can all see it and easily find it, and we don’t have to be fooled if we don’t want to be.
