Energy Department says unrestricted natural gas exports would spike prices

Domestic energy prices would sharply increase if the U.S. conducts unrestricted exports of liquefied natural gas (LNG), the Department of Energy said in a long-awaited report released Tuesday.

The report comes nearly a year after the Biden administration announced a pause on new LNG exports, which surged after Russia invaded Ukraine and set off a scramble for other sources of European energy. The department announced the pause as part of an effort to determine the economic and environmental effects of exports.

The report determined that unregulated exports could lead to a spike of up to 30 percent in wholesale natural gas costs while also creating an extra 1.5 gigatons a year of greenhouse gas emissions by 2050.

“To date, U.S. consumers and businesses have benefited from relatively stable natural gas prices domestically as compared to those in other parts of the world who have faced far greater price volatility,” Energy Secretary Jennifer Granholm said in a statement. “[But] the more volumes of U.S. LNG are exported, the greater the risk of this global price volatility being imported into our domestic market and impacting U.S. consumers and manufacturers.”

The pause did not affect existing export approvals, which are currently sufficient to generate about 15 billion cubic feet a day.

The report is subject to a 60-day comment period, which will stretch into the second Trump administration. Chris Wright, Trump’s nominee for Energy Secretary, is CEO of fracking company Liberty Energy and his nomination has been well-received by industry figures.

The report was hailed by environmental organizations and sharply rebuked by the gas industry.

“These studies show clearly that LNG exports are in gas executives' best interest and nobody else's," Lauren Parker, an attorney at the Center for Biological Diversity's Climate Law Institute, said in a statement. “Exporting fracked gas worsens climate change, harms wildlife and raises prices for U.S. consumers. The studies find current supply meets all domestic and global energy needs. Expanding LNG hasn't been in the public interest for a long time. If Trump wants to drive up dangerous gas exports, he's going to have to answer for causing more deadly storms, condemning the Rice's whale to extinction, and socking consumers with higher costs.”

American Gas Association President and CEO Karen Harbert, meanwhile, blasted the report as “a clear and inexplicable attempt to justify [the Biden administration’s] grave policy error.”

“We look forward to working with the incoming administration to rectify the glaring issues with this study during the public comment period,” Harbert added.