One of the justifications that supporters of the Biden administration’s recent freeze on U.S. LNG (liquefied natural gas) export approvals center around the domestic cost of natural gas. They argue that if the United States continues to export LNG around the world, it will cause natural gas prices to rise here at home.
Here’s the problem: this argument is not rooted in reality. Let’s take a look:
In just eight years of exporting natural gas, the U.S. has now become the world’s largest exporter of LNG.
That undertaking is remarkable in its own right. But consider this: even with the massive expansion of LNG exports, prices have remained incredibly low and relatively stable here at home—in fact, natural gas prices are now even lower than before we were exporting LNG.
As the chart below shows, since the turn of the century (and including when the United States began to earnestly export LNG), prices of domestic gas have remained stable.
And most recently, The Wall Street Journal noted that, “natural-gas futures recently hit their cheapest prices since trading began on the New York Mercantile Exchange in 1990. This is good news for American consumers, who can look forward to lower utility bills, as well as for businesses that use a lot of natural gas making basic materials like steel, concrete, cardboard and fertilizer. Americans’ gas costs in January were about 18% lower from a year earlier, according to the Labor Department.”
As you can see, the scare tactics about US LNG exports on domestic prices fall flat.
We are able to meet the country and the world’s growing demand for natural gas because of our nation’s vast resources, and evolving technology to produce natural gas ever more efficiently and cleanly. Demand for natural gas is projected to continue to increase by 41% over the next couple decades—and American producers are well-positioned to meet both domestic and global demand growth.
The United States has the ability to export US LNG to our partners and allies around the world while keeping prices stable here at home.