Nadja Popovich
The author is a reporter and graphics editor at The New York Times covering climate change, energy and the environment.
In just eight years, the United States has rocketed from barely selling any gas overseas to becoming the world’s No. 1 supplier, a remarkable shift that has profited oil and gas companies and strengthened US influence abroad. But climate activists worry that soaring exports of liquefied natural gas could make global warming worse.
Last month, the Biden administration said it would pause the permitting process for new facilities that export liquefied natural gas in order to study their impact on climate change, the economy and national security.
Even with the pause, the United States is still on track to nearly double its export capacity by 2027 because of projects already permitted and under construction. But any expansions beyond that are now in doubt.
At the core of the debate over whether to allow more exports is a thorny question: With governments across the globe pledging to transition away from fossil fuels, how much more natural gas does the world need?
America’s gas export boom initially caught many policymakers by surprise.
In the early 2000s, natural gas was relatively scarce at home, and companies were spending billions of dollars to build terminals to import gas from places such as Qatar and Australia.
Fracking changed all that. In the mid-2000s, US drillers perfected methods to unlock vast reserves of cheap natural gas from shale rock.
At the same time, natural gas prices began spiking elsewhere in the world, especially after Japan shut down its nuclear plants in the wake of the Fukushima reactor meltdown in 2011 and began demanding more fuel.
That led to a stunning reversal. US companies, led by Cheniere Energy, began spending billions more to convert import terminals into export terminals, and shipments of US gas to other countries began to surge.
Natural gas is most easily transported by pipeline. To send it across oceans, the gas must be chilled to minus 260 degrees Fahrenheit, turning it into a liquid.
The process of making and shipping liquefied natural gas adds complexity and cost, but if the difference between US natural gas prices and overseas prices is big enough, it is profitable.
“It comes down to economics,” said Kenneth Medlock, senior director at the Center for Energy Studies at Rice University.
“Production just keeps growing in the United States, which keeps prices low. And then we keep seeing major demand growth in the rest of the world.”
The export boom has transformed America’s role in energy geopolitics.
Europe has become the biggest importer of American gas in recent years, enabling the continent to slash by more than half its reliance on Russian gas since Russia’s attack of Ukraine in 2022.
In the future, Europe is expected to curb its appetite for gas by adding more renewable energy sources such as wind and solar power.
The main growth markets for natural gas are expected to be fast-growing Asian countries such as China, India, Pakistan, Bangladesh and Vietnam that want to use the fuel for electricity, heating or industrial purposes.
But as US exports keep skyrocketing, critics have raised concerns about the climate change impact of transporting and selling more gas around the world.
The last time the Energy Department studied this issue, in 2019, it concluded that US liquefied natural gas often produced fewer greenhouse gas emissions than other types of coal or gas used around the world.
That meant that more exports could actually be beneficial for climate change if US gas replaced those other fossil fuels.
(When gas is scarce, some countries including Pakistan and Bangladesh have recently opted to burn more coal instead.)
But some environmentalists have disputed those conclusions, arguing that the analysis didn’t fully account for all the planet-warming methane leaks that can accompany natural gas production, and that it didn’t study whether a glut of gas might displace cleaner renewable energy rather than coal.
The Energy Department is expected to study these questions while it puts permits for new projects on hold.
In the meantime, the US gas boom is far from over, even with the permitting pause.
Since 2016, US energy companies have built seven large facilities in Texas, Louisiana, Maryland and Georgia that can export around 11.4 billion cubic feet of liquefied natural gas per day, according to the Energy Information Administration.
Another five projects along the Gulf Coast are already permitted and under construction and will be able to export an additional 9.7 billion cubic feet per day by 2027 — nearly doubling America’s export capacity.
Three more facilities are currently being built in Mexico that will receive US gas by pipeline and then ship it abroad.
The pause, however, could affect nearly a dozen proposed projects in the United States and Mexico that, if built, could boost export capacity by another 10 billion cubic feet per day, according to research by Clearview Energy Partners, a consulting firm.
Whether those projects ultimately go forward remains to be seen. With so many projects locked in, experts say it will be crucial to ensure that methane leaks from gas production are kept as low as possible.
(The Biden administration has put forward several new regulations on methane.) “This is an area where we can actually deliver an emissions win, maybe more so than delaying or even killing a future supply project,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies.
“Because it’s what we do with the emissions on the projects that we know are with us today.”
— The New York Times
Even with the pause, the United States is still on track to nearly do
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