As the United States ramps back its LNG export capabilities, activists are once again claiming that exports will cause domestic natural gas process to spike. But the data – and nearly a decade of real-world market experience – tells a very different story.
The reality is that U.S. LNG has not driven up prices for American consumers. In fact, even as LNG exports have soared, domestic prices have remained historically low – precisely because U.S. production is strong and infrastructure has (mostly) kept pace.
LNG Exports and Domestic Prices: What the Data Actually Shows
Between August and December 2024, the U.S. production climbed from 3.85 billion cubic feet (Bcf) to nearly 4 Bcf, according to the U.S. Energy Information Administration (EIA). At the same time, prices for residential and commercial consumers declined from $23.45/Mcf to $12.98/Mcf for residential customers and from $10.86/Mcf to $9.93/Mcf for commercial users.
That’s not a coincidence. The American Petroleum Institute found that during the first half of 2023 – a period or record-breaking LNG exports – Henry Hub prices averaged just $2.48 per MMBtu. That’s one of the lowest six-month averages in 35 years outside of the COVID-19 pandemic.
Despite the United States becoming the world’s top LNG exporter in 2023, residential prices have stayed well below global averages. That’s because American production has consistently outpaced demand – and because exports spur more investment, more supply and greater efficiency.
What Actually Drives U.S. Gas Prices? Infrastructure is a Key Factor
If exports are not the main reason, what is? Infrastructure constrains. A 2018 Department of Energy (DoE) study made this clear:
“U.S. natural gas prices are far more dependent on available resources and technologies to extract available resources than on U.S. policies surrounding LNG exports.” (emphasis added)
More recently, the Center for Strategic and International Studies (CSIS) reiterated that the Henry Hub prices are tied to supply growth – not export volumes:
“Henry Hub prices can remain cheap even with significant growth in LNG exports. The inverse is also true—low supply growth scenarios create large upward shifts at Henry Hub even if export volumes are restricted.” (emphasis added)
This is why gas prices have gone negative at the Waha Hub in West Texas, despite robust production and demand. As EID previously reported, without adequate pipeline takeaway capacity, producers are stranded.
Thus, this is why pipeline expansions like the Matterhorn Express are critical. As a NERA study pointed out:
“The U.S. will have sufficient supply to meet global demand without steep price increases at home – but only if we can build new infrastructure to transport the natural gas from producers to end users.”
Underground gas storage also plays a crucial role in balancing seasonal demand and smoothing volatility. Without storage, producers are forced to sell at a loss during gluts or scramble during surges.
Bottom Line: The U.S. natural gas market is resilient, efficient and largely insulated from global price swings because it is driven by domestic production and infrastructure – not export volumes.
If we want to keep prices low for American consumers, the answer isn’t to curtail LNG exports – it’s to double down on the infrastructure that allows U.S. gas to flow freely, meet domestic demand and support allies abroad.
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