What to make of DOE's new LNG analysis – Greenpeace – Greenpeace

Until recently, the federal government’s issuance of technical studies of methane gas exports would not have registered as news. Those days are now gone, thanks to the tireless effort of community leaders and environmental advocates who have raised awareness of the devastating impacts of extracting, transporting, processing, and shipping away growing volumes of this dirty fuel, known commonly as liquefied natural gas (LNG).

Although this moment has come at the tail end of President Joe Biden’s term, it comes as welcome news that the Department of Energy has finalized its updated analysis of LNG. The analysis, originally announced in January as part of the Department of Energy’s “LNG pause”, serves as a blueprint for the review of new and pending LNG export applications.¹ Projects impacted by the pause, which include Venture Global’s CP2 and Sempra’s Port Arthur LNG Phase II expansion, have faced stiff opposition from a broad coalition of environmental justice leaders, energy hawks, consumer advocates, and climate-concerned citizens.² The analysis bolsters the case against authorizing these LNG projects, strengthens the potential to block these projects in court, and confirms what has been known for years: fracked gas exports endanger the climate, the economy, and our health.

Notable findings of the analysis

The results of the analysis are well-summarized in a cover letter signed by Energy Secretary Jennifer Granholm. Below, we offer key takeaways from both Secretary Granholm’s letter – which we suggest reading in its entirety – and the Department of Energy analysis itself.

The gas industry is sprinting into a supply glut

LNG export capacity is already skyrocketing, even without new approvals. The analysis indicates there is no need to authorize new LNG export projects in a Paris Agreement-compliant world. Further, projects that are already authorized and financially committed are curtailed or under-utilized in the only scenario of the report that we consider nearly 1.5ºC-aligned.³

An astonishing statistic emerges from Granholm’s letter: “The quantities already approved for export equate to roughly half of the U.S.’s total current natural gas production today.”⁴ The massive price tags to build these hulking LNG terminals would be better directed to clean energy solutions, rather than wasted on projects that may end up stranded.

The LNG industry will raise energy prices for Americans and American businesses

Increased LNG export volumes impose a “triple-cost” on the economy: “the increasing domestic price of the natural gas itself, increases in electricity prices (natural gas being a key input in many U.S. power markets), and the increased costs for consumers from the pass-through of higher costs to U.S. manufacturers.”⁵ According to the study, the greatest residential price impacts would occur in the Southwest and Gulf Coast regions.⁶ This means that low income communities at the fenceline of the LNG build-out would pay not only with their health, but also through their wallets – without ever seeing the financial benefits that fossil fuel CEOs may reap. The U.S. manufacturing sector could bear $125 billion in excess costs between 2020 and 2050 due to gas price hikes caused by increased LNG exports.⁷

LNG terminals force pollution upon already disadvantaged communities

Granholm correctly notes that expanding LNG exports will lead to increased air pollution burdens for communities from the well to the liquefaction terminal.⁸ These communities, especially those along the Gulf Coast, already face “existing environmental burdens from refining, petrochemical, and other industries.”⁹ A report released in August by Greenpeace USA and the Sierra Club, titled “Permit To Kill,” quantified the detrimental impacts on human health from permitted levels of air pollution from existing and proposed LNG terminals.¹⁰ The study confirms the seriousness of this threat, and Granholm’s letter says that it will “only get worse, if volumes of LNG exports continue to dramatically increase.”¹¹ Communities deserve better than being subject to irreversible health harms brought on by corporate greed.

The study also acknowledges that community members and advocacy organizations have raised concerns about issues such as corporate tax abatement, the risk of explosions, barriers to participation in decision-making processes, and effects on local industries such as shrimping, fishing, and tourism.¹²

LNG exports increase global greenhouse gas emissions and worsen the climate crisis

The study finds unequivocally that expanding LNG exports increases global greenhouse gas emissions by slowing the transition to renewables and other clean technologies. The oil and gas industry has often claimed that LNG will displace coal power around the world and therefore lower emissions; instead, this study finds that “LNG exports displace more renewables than coal globally.”¹³ As a result, “in every scenario, increases in LNG exports would lead to increases in global net emissions.”¹⁴

Fundamentally, limiting global warming to 1.5ºC imposes limits on how much fossil fuel can be burned in the coming decades. Past studies from the International Energy Agency show that the scale of the proposed LNG buildout – both in the U.S. and globally – is inconsistent with that 1.5ºC goal.¹⁵ Put simply, there’s no way we can burn all of this LNG and keep ourselves within reasonable climate guardrails.

Granholm’s letter warns that “special scrutiny needs to be applied toward very large LNG projects. An LNG project exporting 4 billion cubic feet per day,” like CP2, “would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023.”¹⁶

Implications for the future of LNG

The finalized analysis of LNG could make the incoming administration’s pro-fossil fuel agenda harder to achieve in at least four ways:

• Strengthening the legal foundation for challenging biased LNG export authorizations. It is almost certain that the next Department of Energy will throw its support behind the LNG industry. Any attempt to issue expedited LNG export authorizations is destined to be challenged in court, and such challenges will be strongly supported by the findings of the LNG analysis.
• Causing the administration to write a new analysis. The administration will have to decide whether to try to disregard the finalized analysis or substitute it for a new one. The former approach would entail greater legal risk, whereas the latter approach would likely result in public scrutiny and lengthy delays for pending projects.
• Raising public awareness of the consequences of LNG expansion. The study and Secretary Granholm’s accompanying letter are an acknowledgement that the fossil fuel industry is nearing the end of its road. The significance of this pronouncement, and the rigorous analysis to back it up, should be celebrated and widely disseminated. Voters can use this information to hold their elected officials accountable in the next election cycle and to advocate for state, federal, and local policies opposing fracked gas infrastructure in the meantime.
• Signaling to foreign buyers that LNG is not clean energy. The LNG industry’s expansion plans depend on foreign buyers, as much as domestic regulation. With countries around the world enacting tighter environmental policies,¹⁷ revising their gas demand projections downward,¹⁸ and even shuttering brand new LNG terminals,¹⁹ the analysis is another reason for buyers to steer clear of long-term U.S. LNG purchasing agreements.

In the days and weeks ahead, we will continue examining the study in detail—with an eye toward strengths, weaknesses, and campaign opportunities.

References

1. The Temporary Pause on Review of Pending Applications to Export Liquefied Natural Gas. 2024. Department of Energy, February 23. https://www.energy.gov/fecm/articles/temporary-pause-review-pending-applications-export-liquefied-natural-gas 
2. What Biden’s LNG Pause Does and Doesn’t Do. 2024. Greenpeace USA. January 26. https://www.greenpeace.org/usa/draft-what-bidens-lng-pause-does-and-doesnt-do/ 
3. This sentence refers to the Net-Zero 2050, Moderate CCS scenario. See Figure ES-1 in Summary Report: Energy, Economic, and Environmental Assessment of U.S. LNG Exports. 2024. December 17. https://www.energy.gov/sites/default/files/2024-12/LNGUpdate_SummaryReport_Dec2024_12pm.pdf#page=10 
4. Statement from U.S. Secretary of Energy Jennifer M. Granholm on Updated Final Analyses. 2024. Department of Energy. December 17. Page 1. https://www.energy.gov/articles/statement-us-secretary-energy-jennifer-m-granholm-updated-final-analyses
5. Statement from U.S. Secretary of Energy Jennifer M. Granholm on Updated Final Analyses. Page 1.
6. Summary Report: Energy, Economic, and Environmental Assessment of U.S. LNG Exports. Page S-4.
7. Summary Report: Energy, Economic, and Environmental Assessment of U.S. LNG Exports. Page S-5.
8. Statement from U.S. Secretary of Energy Jennifer M. Granholm on Updated Final Analyses. 2024. Department of Energy. December 17. Page 2.
9. Ibid.
10. Permit To Kill: Potential Health and Economic Impacts from U.S. LNG Export Terminal Permitted Emissions. 2024. Greenpeace USA and Sierra Club. August 13. https://www.greenpeace.org/usa/permit-to-kill/ 
11. Statement from U.S. Secretary of Energy Jennifer M. Granholm on Updated Final Analyses. 2024. Department of Energy. December 17. Page 2.
12. Appendix D: Addendum On Environmental and Community Effects Of U.S. LNG Exports. 2024. Department of Energy. December 17. https://www.energy.gov/sites/default/files/2024-12/LNGUpdate_AppendixD_Dec2024.pdf 
13.  Ibid.
14.  Ibid.
15. US LNG Flies in the Face of Mainstream Climate Analysis: the Department of Energy must stop all expansion now. 2024. Oil Change International. https://oilchange.org/blogs/us-lng-flies-defies-analysis/
16. Statement from U.S. Secretary of Energy Jennifer M. Granholm on Updated Final Analyses. 2024. Department of Energy. December 17. Page 3; The Final EIS for the CP2 LNG and CP Express Project. 2023. Federal Energy Regulatory Commission. July 28. https://www.ferc.gov/news-events/news/final-eis-cp2-lng-and-cp-express-project-cp22-21000-cp22-22-000
17. Talus, K., S. Gunnar, and J. Atkin. EU Methane Regulation and its impact on LNG imports. 2024. Journal of World Energy & Business Law. October 15. https://academic.oup.com/jwelb/advance-article/doi/10.1093/jwelb/jwae022/7823205
18. See, for example, Reynolds, S. and C. Doleman. 2024. Japan’s declining gas demand will leave utilities with persistent LNG oversupply through 2030. Institute for Energy Economics & Financial Analysis. https://ieefa.org/articles/japans-declining-gas-demand-will-leave-utilities-persistent-lng-oversupply-through-2030; and, Less natural gas consumption in Europe is keeping storage full. 2024. U.S. Energy Information Administration. https://www.eia.gov/todayinenergy/detail.php?id=62564
19. Kimani, A. Germany To Shut Down Key LNG Terminal In 2025. 2024. OilPrice.com. December 16. https://oilprice.com/Latest-Energy-News/World-News/Germany-To-Shut-Down-Key-LNG-Terminal-In-2025.html