On a Friday news dump in January, the Biden administration announced that it will freeze new U.S. liquified natural gas (LNG) export approvals to non-Free Trade Agreement nations (i.e. most countries in the world and including our allies in Europe and East Asia).
The move simultaneously harms the U.S. economy, threatens the security of our allies around the world, and stymies global emissions reduction goals. Unsurprisingly, it was met with widespread criticism and concern from across the political spectrum:
- “Biden’s LNG Decision is a Win for Political Symbolism, Not the Climate“
- “Biden’s Worst Energy Decision“
- “Even Democrats say Biden’s pause on LNG is like ‘throwing a match in a bale of hay“
Lawmakers shouldn’t play politics with America’s LNG exports.
That’s why it’s encouraging news that Rep. August Pfluger (TX-11) has introduced H.R. 7176, Unlocking our Domestic LNG Potential Act – a commonsense measure that would eliminate duplication in the permitting process for LNG exports and thereby expedite U.S. LNG exports to our global allies.
- For a link of the legislative text, click HERE.
When Russia, which historically accounted for roughly 40 percent of European natural gas supply, invaded Ukraine in 2022, the United States stepped up to help our European allies and shipped an average of 6.8 billion cubic feet per day to the continent in 2022. Secretary of State Antony Blinken noted during a trip to Brussels that this 141 percent increase has bolstered America’s geopolitical interests and significantly undercut Russian influence in the region.
The United States was not always the guarantor of global energy security, and U.S. consumers and businesses once seemed destined to perpetual dependence on foreign countries for our own energy needs. In fact, only two decades ago, domestic natural gas production was declining, and the United States was predicted to become a significant importer of natural gas.
However, thanks to the Shale Revolution and bipartisan support of American energy, the United States is now both the largest producer of natural gas and the top exporter of LNG globally.
Natural gas has enabled the United States to lead the world in reducing CO₂ emissions over the past two decades and U.S. LNG exports can help accelerate further progress around the world, providing an emissions reduction “template” to countries—particularly in Asia—which are still heavily reliant on coal and other more carbon intensive fuels.
Numerous studies—and seven and a half years of operating experience—have demonstrated that U.S. LNG exports serve the public interest. Despite claims to the contrary, a recent economic study found that LNG exports “have not had any sustained and significant direct impact on [U.S.] natural gas prices,” while another report concluded that the United States “will continue to have sufficient natural gas resources to satisfy both growing domestic consumption and export demand at relatively low prices.”
The analysis also found that the lack of new natural gas pipeline infrastructure is a material impediment to bringing the lowest cost gas resources to the market. And this is not just theoretical: in 2023, when the U.S. became the world leader in U.S. LNG exports, domestic natural gas prices averaged $2.57, well below the 2010-2015 average of $3.64 before the U.S. started exporting LNG. Today, as the US exports record amount of LNG, prices are near historical lows.
Furthermore, the most recent review from the Potential Gas Committee found that U.S. natural gas resources continue to grow and hit yet another all-time high of 3,353 trillion cubic feet. U.S. LNG exports will help continue to unlock these abundant resources and the many economic and climate benefits they represent.
To maintain our role as a vital supplier of global energy, America needs to have a predictable permitting process that encourages critical investments in energy infrastructure.
H.R. 7176 eliminates the present duplicative administration of LNG exports and sends a signal to the international community that U.S. LNG will remain a reliable source of energy.