U.S. LNG supports a strong economic value chain across all 50 states and is unparalleled in reducing global greenhouse gas emissions by displacing higher emitting fuels, according to Phase 2 of S&P Global’s comprehensive study on the economic and environmental impacts of U.S. LNG.
The report comes as the Trump administration has resumed LNG export permitting, singing a day-one executive order to reverse the permitting pause implemented by the Biden administration and instead encourage the LNG industry to increase exports.
Following the release of S&P’s report, Marty Durbin, president of the U.S. Chamber’s Global Energy Institute, emphasized why the study supports pro-American energy policies – and how it further kneecaps the flawed, activist-driven rationale used by the Biden administration in implementing the ban:
“This report should end any debate: U.S. LNG exports are indisputably in America’s public interest. As the Trump Administration resumes review of export license applications, S&P Global’s modeling provides a more comprehensive and accurate picture than the flawed assumptions used by the previous Administration to justify its halt on export approvals.”
In the Phase 1 report, S&P Global focused on the impact of U.S. LNG on the national economy – which directly refuted debunked claims made by Biden’s Department of Energy – while Phase 2 offers a companion analysis focused on emissions and regional economic impacts.
The beneficial impacts of the U.S. LNG value chain extends to all 50 states
Phase 1 of the study detailed the national-level impacts of U.S. LNG, showing that the industry has contributed $408 billion in GDP since 2016, supporting over 273,000 of U.S. jobs. In complement, Phase 2 provides a regional economic impact analysis, specifically looking at the benefits of future growth of the U.S. LNG industry.
Although natural gas producing states will hold a majority of jobs, such as Texas with the industry supporting 103,000 jobs on average between 2025 to 2040, non-producing states are also set to experience the positive impacts of U.S. LNG growth.
Thirty-seven percent of the predicted jobs, 183,000 on average, will go to non-producing states between 2025 to 2040. Among the states set to receive the biggest benefits are California, Illinois, Arkansas, and Florida, with each one having 10,000 jobs supported by U.S. LNG.
In terms of GDP, S&P Global predicts in their Base Case that cumulative GDP contributions will reach $1.3 trillion, with 30 percent generated in non-producing states.
The findings of S&P Global align with those found in a study commissioned by the Department of Energy in 2018, which evaluated the benefits of LNG to local communities. Across all the scenarios analyzed, DOE found that increased LNG exports would lead to higher levels of GDP and consumer welfare.
U.S. LNG has environmental advantages.
Another key focus of part two of S&P’s analysis was emissions, and it is unsurprising that the findings support what the industry has said for years: natural gas is critical for achieving decarbonization goals.
According to the analysis, higher U.S. LNG exports will lead to a reduction in overall global emissions as they would replace more greenhouse gas intensive fuels, such as coal. Coal emits roughly 70 percent more greenhouse gases than the LNG it would replace, showcasing that LNG is an advantageous energy source moving forward. S&P Global’s fact sheet of their recent report shows an example:
“If pending LNG projects were to be halted, 85% of lost export volumes would be replaced by fossil fuels from other countries, including higher emitting coal and oil, and other sources of LNG. Life cycle GHG emissions of coal are nearly 70% percent higher than U.S. LNG.”
Similarly, the report quantified the impact of restarting paused LNG projects:
“Moving forward with six halted U.S. LNG projects would avoid up to 65 million tons of greenhouse gas emissions annually—an amount equivalent to taking 14 million gasoline powered vehicles off the road.”
Industry leaders agree with the findings—and have long been advocating for increased use of natural gas to achieve environmental goals. Karen Harbert, President and CEO of the American Gas Association highlighted:
“The contribution of U.S. natural gas to driving down emissions in this country and the potential for lowering global emissions is unquestioned.”
If the United States decided to lessen its exports of LNG, as the Biden administration attempted with its misguided LNG export permitting pause, geopolitical allies would simply get their energy elsewhere. For example, Europe and Asia would likely delay their move from coal to oil, which directly contradicts international decarbonization goals.
Increased LNG infrastructure can lower costs for American consumers
At the same time, the study found that expanded pipeline infrastructure could reap enormous consumer benefits.
The Permian Basin, namely the Marcellus and Utica formations, have ample gas reserves, enough to supply the nation for about 17 years. Despite abundant, low-cost supply available in the neighboring area, the Northeast region is facing high energy prices. In Boston, Chicago, and New York City, fuel prices are up 160 percent on average.
Natural gas could easily lower prices for these consumers, but there is an issue: there is no infrastructure to get the affordable fuel to those areas due to misguided policies inhibiting pipeline and infrastructure expansion. S&P Global estimates that expanding pipeline capacity by six bcf/d could save $76 billion by 2040.
Unfortunately, interstate pipelines are subject to federal jurisdiction, and often face additional cumbersome regulations, leading to consistent delays. However, President Trump and Congressional leaders have promised to pursue comprehensive permitting reform, bringing hope to the industry that the savings and benefits from expanded pipeline infrastructure are within reach.
If federal permitting reform can be passed, the cost savings for consumers far exceed the costs of the expanded pipelines.
Marty Durbin, president of the U.S. Chamber’s Global Energy Institute, further detailed why expanding pipeline access can benefit American consumers at the pump:
“The Northeast has walled itself off from some of the most affordable energy in the world, but it doesn’t have to be that way. Residents in New York and New England are paying the highest energy prices in the country due to the choices of elected officials to stop the kind of pipeline projects that exist almost everywhere else in the country. If built, businesses and families would see immediate and lasting price relief instead of escalating prices that will only get worse.” (emphasis added)
Bottom Line: Evidence continues to solidify the widespread benefits of the U.S. LNG industry—from supporting local communities to aiding geopolitical allies in their emissions reduction goals. Now, with President Trump’s pro-energy agenda being pursued, U.S. LNG is set to continue to expand its positive impacts in the era of American energy dominance.
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