Why the US pause on natural gas exports is a win for consumers  

The announcement that the Biden administration will pause approvals for new liquefied natural gas (LNG) export facilities is welcome news to local communities fighting these projects. But consumers across the country should be breathing a sigh of relief as well.  

In the eight years since the first LNG export terminal opened on the Gulf Coast, the U.S. has become the world’s largest LNG supplier. America now has seven terminals, shipping more than 10 percent of the nation’s gas output overseas. One facility is expanding, and six more LNG facilities that rely on U.S. gas are already under construction, including two in Mexico. By 2028, these facilities are expected to export one-fifth of the gas produced in the U.S. 

This LNG boom has been welcomed by the oil and gas industry, but it hid a dirty secret: As the nation increases gas exports, U.S. gas consumers face higher and more volatile utility bills.   

This isn’t just theoretical. It’s already happened. After Russia began manipulating Europe’s gas markets in late 2021, the continent turned to LNG to fill the shortfalls. A global bidding war for American LNG lasted for more than a year. LNG exporters bought all the gas they could handle, U.S. gas stockpiles dwindled, and wholesale gas prices spiked to their highest levels in more than a decade.  

It was a twist on the old adage: The world sneezed, and the U.S. caught cold. 

Gas utilities passed on the higher costs to their customers, causing real pain for families who use gas to heat homes and cook food. Higher prices hit businesses and industries, making it harder and costlier to keep the lights on, since power generators rely so heavily on gas. Higher energy costs filtered throughout the economy, boosting inflation. 

This is a story that the gas industry wants to hide. But the economics are simple: Shipping more gas overseas can leave less gas for consumers here.  

When the circumstances are right — a cold snap in Asia, a pipeline explosion in Europe, unrest in the Middle East — overseas buyers ramp up their demand for LNG and compete directly with U.S. consumers for a limited supply of U.S. gas. Wholesale gas prices rise, and gas companies reap windfall profits — not just from the gas they sell overseas but more significantly, from the gas they sell directly to the U.S.  

LNG exports are a backdoor way for gas companies to siphon money from consumer wallets. It’s hard to say exactly how much money LNG exports have cost U.S. homes and businesses, but the U.S. Department of Energy says that the country spent about $119 billion more on gas in 2022 than in 2019, the last “normal” year before COVID-19 and the Russian invasion of Ukraine roiled gas markets.   

Families and businesses shouldered most of the burden. If prices had remained at their long-term averages from September 2021 through 2022, IEEFA estimates that homeowners and renters would have spent about $14 billion less on their gas bills. Industries and businesses would have spent about $44 billion less. The cost of generating electricity would have been lower by about $50 billion. 

In short, it’s likely that LNG exports have already cost U.S. consumers and businesses more than $100 billion — money that was hoovered from the rest of the economy and into the coffers of oil and gas companies. 

Federal law only allows LNG exports when they’re found to be in the public interest. But federal regulators consider spiking gas prices to be a boon for the U.S. A key 2018 study commissioned by the Energy Department admits that LNG exports raise domestic natural gas prices. The department, however, brushes off the implications: “If U.S. households, or their retirement funds, hold stock in natural gas producers, they will benefit” from higher prices. It’s a clear example of a federal process putting shareholder interests ahead of the welfare of ordinary people.  

This is just one of many problems with the way the government approves new LNG exports. A pause in new approvals is needed to thoroughly consider the effects of these projects on consumers, local communities, and on the climate. The vast LNG industry has already created havoc for U.S. gas consumers. Once the current round of expansions is finished, LNG exports are slated to almost double, exposing consumers to even more price volatility. 

We’ve already dug ourselves into a hole. It makes sense to take a breather to decide if it’s time to stop digging. 

Clark Williams-Derry ( is an IEEFA energy finance analyst. 

Back to top button