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The future of America’s natural gas export boom has been thrown into doubt after a federal government report found that unbridled expansion would hurt American consumers and global climate goals.
A long-awaited Department of Energy study released on Tuesday said that the industry’s continued rapid growth risked driving up domestic fuel prices, increasing greenhouse gas emissions and supporting China.
The findings could open the door to legal challenges that would hinder liquefied natural gas export growth from the world’s biggest supplier even as Donald Trump takes office with a pledge to ship US gas to the world in pursuit of “American energy dominance”.
“The main takeaway is that a business as usual approach is neither sustainable nor advisable,” energy secretary Jennifer Granholm said.
“Increasing exports unconstrained would surely generate more wealth for the LNG industry. But American consumers and communities, and our climate, would pay the price.”
The US LNG industry has grown exponentially since its establishment less than a decade ago, turbocharged in recent years by European demand for American molecules following Russia’s full-scale invasion of Ukraine.
A surge in shipments from the US was crucial to European consumers during the energy crisis that unfolded across the continent following Russia’s invasion, as soaring prices damaged the continent’s industry.
Last year, the US overtook Australia to become the world’s biggest LNG exporter, shipping 11.9bn cubic feet a day — enough to satisfy the combined gas needs of Germany and France. The industry has ambitious plans to double exports by the end of the decade.
But President Joe Biden halted the licensing of new export terminals in January this year while his administration assessed the costs and benefits of the boom, prompting a backlash from the oil and gas industry.
The report released on Tuesday forecast that increased shipments could push up wholesale domestic natural gas prices by more than 30 per cent by 2050, increasing annual household energy bills by more than $122.
The study is likely to be disregarded by Trump, who has vowed to restart licensing on the first day of his second administration. The oil and gas industry argues that LNG exports benefit the climate by replacing dirtier coal in power generation.
But the study found that additional US LNG exports would displace more renewables than coal globally and that direct emissions from the industry would reach 1.5 gigatonnes annually by 2050 — about a quarter of total current US emissions.
The American Petroleum Institute, Washington’s powerful oil lobby group, disputed the report’s findings, saying Americans enjoyed low natural gas prices and the “politically motivated pause” on LNG permits should end.
Green groups said the study reinforced their position that the industry’s rapid growth would hurt the environment.
“This study confirms that Donald Trump’s plans to supercharge LNG exports will come at the expense of consumers and the climate,” said Raena Garcia, senior energy campaigner at Friends of the Earth.
Some have said that its findings could be used as the basis for future legal challenges that could stall more development.
Moneen Nasmith, senior attorney at Earthjustice, said that the next administration “should be taking these findings seriously and prevent further expansion of export volumes” and that “failure to do so will raise serious questions about the legality of any future approvals”.
A senior department of energy official declined to say whether the report would provide grounds for legal challenges but emphasised that all the information contained in the study would be publicly available including to those seeking to object to projects via the courts.
The report also said expanding American LNG exports could undermine, rather than boost, domestic energy security.
Granholm said growing LNG exports would no longer just support close allies such as Europe and Japan but would aid China, a geopolitical rival.
“China’s LNG imports are expected to be the highest of any country through 2050,” she said.
Daniel Yergin, a Pulitzer Prize-winning energy historian and author of The New Map, said any suggestion that boosting LNG exports would undermine the US and its allies’ energy security was wrong.
“At this point, LNG, is part of Nato’s arsenal. [Russian President Vladimir] Putin was convinced that he could use the energy weapon and undermine the coalition in Europe. It failed because of LNG.”
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