On this day ten years ago, a tanker carrying liquefied natural gas (LNG) sailed from an export terminal in Southwest Louisiana bound for Brazil. Such a departure is routine now, but in 2016 it marked a historic first as the inaugural LNG export from the U.S. Gulf Coast and a defining moment in America’s energy renaissance. Today, the industry stands as proof of what’s possible when policymakers clear the way for private innovation and investment. Thanks to those private sector investments over the last ten years, America is more secure, more competitive, and more prosperous because it chose to export its energy abundance.
Natural gas fuels economic opportunity nationwide—from drillers and pipeline operators in the Midwest to construction crews and longshoremen along the Gulf Coast. Reports from industry estimate LNG exports alone have contributed nearly $500 billion to U.S. GDP, generated tens of billions in federal and state tax revenue, and supported hundreds of thousands of American jobs. Embracing our abundant natural resources has played a large role in reenergizing communities with economic opportunity that government programs and subsidies could never match.
These benefits didn’t happen by accident. America is home to the most innovative companies in the world and, through their investments in workers, equipment, and technology, they have been able to tap into areas that were thought to be impenetrable just two decades ago. Through breakthroughs like horizontal drilling and hydraulic fracturing, the shale boom created the environment that has paid dividends for communities all across the country. LNG exports are simply a downstream result of that success.
Now the United States is the world’s largest LNG exporter at about 11.9 billion cubic feet per day, and growing. The Energy Information Administration estimates that developers will be building export terminals to just about double our export capacity over the next three years. That means construction jobs in the short-term, as well as new pipeline projects that will need to be built to transport natural gas from production areas that will also likely see higher extraction levels.
Incredibly, we are at roughly 250% of what Russia is exporting. In fact, Deutsche Bank originally estimated in 2016 that it would take about a decade to reach Russia’s export levels, but thanks to American ingenuity we matched its exports within just the first year.
Every LNG cargo shipped overseas represents billions of cubic feet of domestically produced energy sold into global markets, bringing export revenue back to the United States. From a geopolitical perspective, our gas helps displace orders that might come from our adversaries and fund their war machines. And, at a time when the current Administration is focused on trade deficits, exports can be a pro-growth tool to narrow the trade deficit. This approach is a much better alternative than heavy-handed tariffs that are economically damaging.
Despite LNG’s numerous benefits, the Biden-Harris Administration weaponized the Executive Branch against natural gas. It imposed permitting delays, a de-facto export ban, and a new tax on natural gas—all of which harmed taxpayers, workers, and businesses without any clear rationale. Such a politically-motivated decision harmed our standing with our allies and created an unprecedented level of uncertainty that can be destructive to such a capital-intensive and long-term industry. Thankfully, President Trump repealed that policy error on Day One of his second term.
Unfortunately, big government advocates want to close the book on this incredible market-driven success story. Some believe that reinstating a ban on LNG exports will lead to lower natural gas prices here at home. Implementing such a misguided export ban would likely have significant economic consequences across our broader economy and fuel job losses for working class Americans.
According to available data, a ban would not yield meaningful price reductions for electricity derived from gas-fired power plants. In the year before the first U.S. LNG export, natural gas used for electric power generation averaged about $3.38 per thousand cubic feet. Today, even with record export volumes, prices are roughly $.50 lower. While overall inflation has risen by 38% since 2015, natural gas prices have actually declined by about 15% over that same period—underscoring the resilience and abundance of America’s energy supply.
It’s clear that, even with exports skyrocketing over the past decade, there has been no increase in the natural gas input prices that go into electricity generation.
Nevertheless, some have attempted to correlate high electricity prices and LNG exports. Just last year, a group of ultra-progressive lawmakers urged Energy Secretary Wright not to approve additional export terminals using the aforementioned logic.
Yes, electricity prices are high, but they are largely caused by poorly thought out government policies. This includes tax subsidies favoring less reliable clean power generation, retirements of traditional baseload power, and renewable energy goals. The best way to lower costs and meet the growing demand for natural gas is through comprehensive permitting reform and a repeal of policies that undermine the integrity of electricity grids. The faster the federal government can responsibly approve pipelines, drilling, power plants, and export terminals, the better it will be for everyone.
Equally important is enactment of the House-passed “Unlocking Domestic LNG Potential Act” by Congressman Pfluger (R-TX), which would transfer approval of LNG exports from the U.S. Department of Energy (DOE) to the Federal Energy Regulatory Commission. His bill would attempt to remove political pressure from influencing the approval of future LNG exports which might occur should another hostile administration take power.
Such an approach will better serve ratepayers, taxpayers, and businesses that want to maximize the use of natural gas.
The last ten years should be a blueprint for what is possible when the government takes a backseat and allows private companies to take the wheel. It’s a result that increases prosperity, creates jobs, and yields higher levels of tax revenue without new taxes.
Cheers to LNG exports now and into the future