Now Is Not the Time to Cut (LNG) and Run

Over the past two decades, America’s energy landscape has completely transformed because of natural gas. As our nation unlocked shale reserves and dramatically increased natural gas production, we went from a posture of energy scarcity to energy abundance and opportunity. This development has allowed the United States to provide affordable, reliable, and cleaner energy both at home and to our allies abroad. Unfortunately, the Biden Administration's announcement to restrict natural gas exports has raised significant risks around the globe.  

The shift to natural gas allowed many utilities to pivot away from coal, resulting in marked reductions in emissions. According to the International Energy Agency, coal-to-gas switching since 2010 has reduced emissions by about 500 million tons of CO2 globally—equivalent to putting 200 million EVs on the road. The U.S. electricity sector is Exhibit A of this success story, as fuel-switching to natural gas accounts for 58 percent of power sector emissions reductions since 2005.  All of this has occurred even as America’s population and GDP have grown. 

The rise of natural gas brings other major benefits, too. In its liquid form (LNG), natural gas can be transported around the world to help America’s allies and trading partners meet their own energy needs, typically with similar environmental benefits as in the U.S. The U.S. started exporting LNG in early 2016 and is now the world’s largest exporter.  

That expanded export capacity arrived not a moment too soon for America’s closest allies. Weaponization of energy was central to Vladimir Putin’s strategy to invade Ukraine and gain leverage over Europe, which relied on Russia for approximately 40% of its natural gas needs prior to the war. Thanks to robust LNG exports, the United States quickly stepped in to provide our allies with the resources they needed. In 2022, U.S. companies provided 50% of Europe’s liquefied natural gas imports, while Russian gas shipments to the continent dropped by half compared to 2021. In 2023, two-thirds of EU LNG imports were delivered from America’s shores.   

Eurogas, an association of 77 companies that deliver power to homes and businesses across Europe, recognizes this contribution, recently stating that "(T)his LNG has been a relief for Europe and contributed to the stabilisation of gas and electricity prices in Europe for consumers, after a long period of record high prices caused by the Russian supply drop."

Demand for U.S. LNG continues to rise, and unfortunately, dependence on Russian natural gas remains unacceptably high in Europe. Per Eurogas: “This LNG does not fully replace the gas we had in the past from Russia, we still have a supply gap - and as such we need additional LNG imports from the US. Moreover, additional volumes of US LNG are set to play a crucial role for European energy security in case of other possible supply shortfalls caused by geopolitical instability in the future. US LNG exports are important for energy security globally, including in Asia, and especially for US allies.” 

The need for stable long-term natural gas supplies extends well beyond Europe. In a letter to Energy Secretary Jennifer Granholm earlier this month, the Chief Executive of the Asian Natural Gas and Energy Association wrote, “(W)ithout sufficient access to gas imports, energy security and the energy transition will be elusive for the people of Southeast Asia, and that in turn places at risk the ambitious decarbonization plans spearheaded by Japan.”

Yet, despite this clear need, anti-energy activists are pressuring the Biden Administration to restrict US LNG exports, and their requests are being seriously considered. The activists typically cite two factors in support of their position, namely that: (1) global gas demand is set to decline, and (2) life-cycle LNG emissions exceed that of coal. In both cases, they are factually wrong.  

With respect to demand, the Biden Administration’s Department of Energy (DOE) forecasts global natural gas demand to grow 29% between 2022 and 2050, with LNG demand growing in both Europe and Asia during that time period. Similarly, the International Energy Agency states that in order to meet this growing demand, “(A)n additional 240 bcm per year of LNG export capacity is needed by 2050 above what currently exists or is under construction.”   

The DOE has also looked closely at the life-cycle greenhouse gas emissions of U.S. LNG compared to coal in both Asia and Europe. After thorough study, DOE concluded that LNG has a far lower emissions footprint than not only coal but also Russian natural gas transported via pipeline to Europe.

In December, nearly 200 nations who convened at the COP28 climate conference agreed to the Dubai Consensus that “transitional fuels can play a role in facilitating the energy transition while ensuring energy security”—a clear reference to the potential for natural gas to displace higher emitting fuels.

The bottom line is that the world needs American LNG. Restricting U.S. exports would undercut our allies who are looking to reduce their dependence on Russian energy and push some to expand their use of coal, which results in higher emissions of air pollutants and carbon dioxide, according to the U.S. Energy Information Administration. It also would undercut the energy transition, which first and foremost requires affordable and reliable energy, and ignore the vital role of natural gas as a backup to support widespread deployment of renewables.  

Constraining America’s energy strengths at a time of heightened geostrategic tensions is the wrong thing to do. The White House should put politics aside and show global leadership and reliability by resisting calls to restrict LNG exports.