National Center for Energy Analytics (NCEA) Senior Fellow Tristan Abbey recently published a report examining the politicization of liquid natural gas (LNG) exports and recommending three pathways to ensure the United States maintains, even expands, the economic and geopolitical benefits from its dominant position in the global LNG market. Abbey explores the history of LNG exports, the mechanisms by which the United States ascended to primacy, and the urgency in pursuing reform to capture a “once-in-a-generation” opportunity.
Scott Tinker, an NCEA Advisor, Director Emeritus of the Bureau of Economic Geology at the University of Texas, and founder and chair of the Switch Energy Alliance, observed: “Natural gas consumption is growing in every major geopolitical region in the world. It has a fundamental role to play in our energy future to reduce emissions, provide molecules for everything from fertilizers to plastics, provide heat for everything from cement to steel, provide fuel for vehicles as methane or hydrogen, to make electricity, and much more. LNG is the only way to move natural gas across the oceans, making it globally fungible. To politically limit U.S. LNG is silly.”
Terrence Keeley, another NCEA Advisor, chairman of 1PointSix LLC and the Impact Evaluation Lab, and former managing director at BlackRock, said about the report: “Abbey aptly highlights the incongruity between global market realities and the counterproductive politicization of LNG export regulation. This crucial market demands stability anchored in symbiotic, long-term relationships. The United States is uniquely positioned to be the reliable trade partner LNG consumers demand—and many of these consumers are U.S. allies. Washington policymakers should heed the recommendations in this critical and timely study.”
Abbey’s report offers a fresh look at the maturing global LNG market, and at how American exporters were able to meet increased demand from Asia and especially Europe following the Russian invasion of Ukraine. Abbey also highlights the problems created by recent political actions that threaten the United State’s ability to meet future global demand growth. The report identifies three paths for LNG export reform: 1) Reversing the export pause; 2) revising the Department of Energy’s export authorization process; and 3) establishing the Federal Energy Regulatory Commission as a more independent entity focused mainly on technical reviews of energy infrastructures.
Mark P. Mills, Executive Director of NCEA, added, “That the global market will consume far more LNG is clear to all serious observers. We have a choice of letting American companies serve that demand or throttling them, thus allowing others to do so, not least OPEC and Russia.”