DOE Issues LNG Export Study; Public Comment Period Straddles the Upcoming Administration Change

There had been considerable concern among proponents of LNG exports that the Study would be used to deny export applications if Vice President Kamala Harris had won the presidential election. Her loss in November removed that concern, and President-elect Donald Trump has announced his intention to lift the pause on the first day of his administration. It remains to be seen whether the Study could pose a risk to export authorizations if they are appealed. The Trump administration will have to take care to follow the applicable procedural and substantive requirements, based on evidence in the public record, in order to minimize the risk. For this reason, we recommend that proponents of LNG exports respond to DOE’s request for comments by the February 18, 2025 deadline, as discussed below.

The Study

The Study used four models¹ to evaluate a range of policy, technology, and U.S. LNG export scenarios. The scenarios were based on three overall global greenhouse gas (“GHG”) emissions levels: (1) Defined Policies; (2) Commitments; and (3) Net Zero. The Defined Policies scenario based projections on the IRA, BIL, and Environmental Protection Agency guidance and policy for the U.S. and emissions policy consistent with previous published studies for the rest of the world. The Commitments scenario based projections on the Defined Policies and domestic and global metrics to reduce GHG emissions by 100 percent of their 2005 level in the U.S. by 2050 and eight percent each year for countries without emission reduction commitments. Finally, the Net Zero scenario based projections on the entire world achieving net-zero CO₂ emissions by 2050. The Study also modeled projections for each scenario based on two different levels (High and Moderate) of availability and deployment of carbon capture and sequestration (“CCS”) technology. The High CCS scenario assumed the currently available CCS levels, and the Moderate CCS scenario assumed moderated levels of CCS and accelerated reductions in the costs of renewable energy and storage technology. The Study then modeled LNG export projections based on the (1) Model Resolved Exports (unrestricted LNG exports based on global supply and demand, as determined by the model); (2) High Exports (LNG exports outpacing the model); and (3) Existing/Final Investment Decision (“FID”) Exports (LNG exports held at 90 percent of the capacity reached in final investment decisions as of December 2023) models. Finally, the Study manipulated supply to see how the models would change under (1) High U.S. Supply (lower prices with higher availability); (2) Low U.S. Supply (higher prices with lower availability); and (3) High Middle East Supply (a competitive Middle East market that could displace U.S. sales).

The United States’ LNG export capacity at the end of 2023 was 11.4 Bcf/d. The Study estimated that the 2050 LNG export capacity across the Model Resolved Exports would be 56.3 Bcf/d for the Defined Policies, 33.1 Bcf/d for the Commitments with High CCS, 26.8 Bcf/d for the Commitments with Moderate CCS, 28.5 Bcf/d for Net Zero with High CSS, and 17.3 Bcf/d for Net Zero with Moderate CCS.

The Study divided the results into four major categories: (1) Domestic Supply and Economic Impacts; (2) Global Energy Security; (3) Greenhouse Gas Emissions; and (4) Environmental and Community Effects.

Domestic Supply and Economic Impacts

The Study’s key finding was that the U.S. natural gas supply is sufficient to meet modeled global and domestic LNG demand under all scenarios. In terms of impacts on U.S. domestic natural gas prices and other economic indicators, the Study identified both positive and negative indicators. With regard to domestic natural gas prices, the Study expected the Henry Hub index price to increase more in higher-export scenarios. Domestic customers would pay four percent more under Model Resolved Exports compared to Existing/FID Exports in 2050. The higher domestic costs would be more pronounced in the Gulf Coast areas where the LNG export terminals are located. However, High U.S. Supply would result in lower price increases in all scenarios compared to Low U.S. Supply. Increased LNG exports would stimulate an increase in gross industrial output across all oil and gas supply assumptions. Under the reference supply scenario, increased LNG exports would result in 20 percent and 130 percent increases in industrial natural gas consumption for production and liquefaction industries, respectfully. The increase in exports and domestic LNG consumption is coupled with an increase in overall U.S. GDP. The Study predicted that an increase from the Existing/FID Export level to the Model Resolved Export level would result in an $80 billion increase in GDP in 2050 and a $410 billion cumulative increase in U.S. GDP from 2020–2050.²

While the Study concluded that domestic natural gas prices would likely increase as exports increase, DOE found that the long-term take-or-pay nature of U.S. contracted LNG exports has sheltered short- and medium-term gas prices from price surges. LNG export terminals have approximately 80 percent of their capacity contracted through long-term agreements, so that U.S. facilities cannot significantly increase output in response to sudden increases in global demand. DOE believes that this structure ensures domestic prices and quantities are stable, and American citizens are not in jeopardy of energy insecurity from the lack of gas supply.

Global Energy Security

The Global Energy Security section of the Study discussed the strongly positive role that U.S. LNG export policy can play in stabilizing global natural gas markets. DOE asserted that U.S. export policy fosters energy security because off-takers have the option to re-sell contracted LNG to other countries that import U.S. LNG in contrast to exports from countries, such as Qatar, that typically have less delivery flexibility and face threats to shipping around the Arabian Peninsula. This helps stabilize markets that expeditiously require LNG inputs because of environmental or political changes.

The Study pointed to the Russia-Ukraine War, which massively reduced Russian LNG exports to Europe, as an example of the role U.S. exports play in increased energy security. European countries faced high energy prices and had to turn to U.S. LNG imports to help meet their energy demand.

The Study also forecasted a shift in global demand for LNG before 2050. The Study noted that Europe has passed legislation to phase out fossil fuels and promote renewable and low-carbon gas, such as hydrogen. On the other hand, the Study asserted that the Asian market is poised to become the dominant LNG importer as Europe incorporates more renewable energy technology. China has recently become the largest LNG importer in the world and has signed contracts with operating or proposed U.S. LNG projects. Under all scenarios, China is expected to remain the largest LNG importer by 2050.

Greenhouse Gas Emissions

While the Study ultimately concluded the increased LNG exports would increase overall global GHG emissions, the magnitude of the increase in emissions depended on the availability of CCS technology and which energy source LNG replaced (i.e., LNG replacing coal or oil versus LNG replacing renewable sources). The Study acknowledged uncertainties in its analysis of GHG emissions volumes and intensities, such as fossil fuel intensities and emissions from land use changes varying in different regions. When analyzing the shift from Existing/FID Exports to Model Resolved Exports under the Defined Policies scenario, the Study predicted that overall global GHG emissions would significantly increase. Under constrained emissions scenarios (Commitments and Net Zero) and High or Moderate CCS, the projected overall global GHG emissions would decrease. Perhaps unsurprisingly, the High CCS scenario did not equate to lower emissions during the modeled transition compared to the Moderate CCS scenario.

The Study noted that GHG emissions would increase under higher export scenarios because of incremental additional emissions resulting from the production and liquefaction processes. Therefore, the carbon intensity of exported LNG could be higher for a higher-emitting liquefaction process. The Study also noted that the increase in global emissions for the transition between the Existing/FID Exports to Model Resolved Exports under the Defined Policies scenario would result in a Social Cost of GHG impact of $84 billion, $140 billion, or $250 billion using a 2.5%, 2.0%, and 1.5% discount rate respectively.³

Environmental and Community Effects

Environmental Effects

The Study discussed various environmental effects from increased LNG exports and impacts to the air, water, and land but did not attempt to account for how those impacts could be minimized or mitigated through the myriad regulations that are already in effect and govern the exploration, production and transportation of natural gas. In that regard, the discussion in the Study about these impacts is much better understood as an overview of the different types of environmental impacts that can arise in connection with these activities, than as a meaningful quantitative estimate of those impacts. The Study is silent about how permitting or other appropriate measures could minimize or mitigate impacts, and thus the Study should not be understood as a predictor of the actual impacts of natural gas production, transportation or use.

Some of the Study’s omissions implicate very significant considerations. For instance, in the discussion of GHG emissions, the discussion of environmental impacts only briefly mentions that substitutions away from coal and oil would result in decreases in global GHG emissions. The Study failed to highlight that the increase in the use of natural gas to produce electricity worldwide has led to significant decreases in the share of worldwide electrical power generated from coal and oil from 1985 to 2023.⁴ Not only does displacing liquids and coal in the generation of electricity decrease the emissions of GHGs associated with electricity generated from coal and fuel oils, but it also sharply reduces emissions of particulate matter and sulfur dioxide, which can have a range of adverse health impacts, especially in the communities that the Study identified as disproportionately affected by fossil fuel development. While acknowledging there will be increased GHG emissions from increased gas liquefaction and export, the Study failed to do any quantitative analysis of how they might impact air quality and pollution when the reductions in GHGs and more conventional pollutants are considered.

Likewise, the Study discussed other various potential impacts associated with the hydraulic fracturing process including its withdrawal and transportation of water to hydraulic fracturing locations. The Study also noted that the management of wastewater from hydraulic fracturing can also pose problems when hydraulic fracturing fluids and stray hydrocarbons migrate to groundwater aquifers, surface spills of oil and gas fluids enter local water bodies, and water used in the hydraulic fracturing process is inadvertently discharged into surface water sources. Induced seismicity, seismic events caused by human activities, also presents a major concern about the impact of hydraulic fracturing on the land. While the Study noted that researchers have found temporal and spatial correlations between hydraulic fracturing using injected water and the disposal of water in underground saltwater disposal wells in Texas, Oklahoma, Kansas, Colorado, Arkansas, and Ohio, it failed to discuss the various measures that have been developed by industry and mandated by regulators to avoid and mitigate seismic concerns. The Study also explored how increased LNG production could also impact land use. Land use may have to change to accommodate the increased need for LNG production facilities transmission pipelines, compressor stations, and water and waste disposal facilities. DOE asserted that these projected changes will impact habitats for plant and animal species through deforestation and increased noise, light, and human activity. Throughout this discussion, though, there is no comparison to what the impacts to these resources would be in the absence of LNG providing energy to meet global demand. Although there is a brief discussion of how LNG exports enhance supply security for markets reducing reliance on coal, for example, there is no discussion of the environmental impacts from continued or increased reliance on coal.

Community Effects

The Study noted that natural gas production tends to increase employment and wages in regions and communities where facilities are located. However, the Study also cites sources for the general proposition that production, transportation, and export facilities tend to be sited in communities that are largely low-income and comprised of people of color. The production process in some circumstances can release air pollutants that have adverse impacts on human health but regulatory regimes (such as the Clean Air Act) manage or mitigate such impacts by applying health-protective emissions controls and other modern technology requirements. Moreover, the Study does not address comparisons in the regulatory frameworks across different countries to understand whether LNG derived from gas development in the United States is more environmentally protective overall than whatever energy development and production might occur in other regions that would fill the gap in absence of U.S. LNG. The Study also states that since the LNG export industry is newer, significantly less research has been done on LNG than fossil fuels in other forms. The majority of the existing and proposed export terminals are concentrated in the Gulf Coast. DOE has asserted that the development of LNG export facilities in some of these communities could boost the local economy during the construction process and provide high-paying jobs with cleaner emission profiles than traditional fossil fuels.

The Next Steps

While the Study was released on December 17, 2024, the public participation process has just started. The DOE announced a 60-day comment period, which began when the Study was published in the Federal Register.⁵ Comments are due by February 18, 2025. The DOE announced that it does not intend to revise the Study, but that the comments will inform the DOE’s public interest determination in future LNG export proceedings. However, the incoming Trump administration will be in office by the midway point of the 60-day comment period, and President-elect Trump has announced that he will lift the pause on LNG export approvals as soon as he takes office. As for possible Study revisions, although the Study was published as a final document, the DOE under the incoming Trump administration could take the opportunity to revise or even revoke the Study based on comments received during the comment period, or mute certain aspects of the Study in DOE’s response to comments—as happened to a document DOE prepared and published in the Federal Register following the comment period for the 2019 update. Whether the Study presents any impediment to the incoming Trump administration’s policy goals, including potential future approvals of LNG export authorization, depends on several factors.

One potential concern for those who may seek approvals for additional LNG export authorizations in the future is whether the Study will be viewed, by the agency, project opponents, or by future reviewing courts, as a thumb on the scale against export approvals, or evidence that additional LNG exports are not in the public interest. Interest groups opposed to the expansion of U.S. natural gas infrastructure have successfully deployed, in past litigation, arguments that agency approvals (e.g., in the first Trump administration) “ignored the science” or bypassed “agency experts” to advance policy goals in a manner inconsistent with applicable legal requirements. Those groups have had success in challenging key federal authorizations for natural gas infrastructure, and in some cases enjoining construction of the same, based on a narrative that an approving agency had cut corners, acted in a manner unsupported by the scientific or administrative record, or failed to provide a reasoned justification for its actions, in violation of applicable substantive and procedural requirements. Some commenters have expressed concern that this Study could present a durable impediment to DOE authorizing additional future LNG export amounts, effectively tying the agency’s hands in certain respects. In our view, while those concerns are understandable, and while the new administration will undoubtedly need to acknowledge and engage with the Study in taking future actions, there are reasons to believe the Study is not necessarily a lasting impediment to the new administration approving additional volumes of LNG for export, assuming it follows applicable procedural and substantive requirements. To this end, several points bear emphasis:

First, although the Study provides information and predictions about certain potential inputs to future public interest determinations, it does not purport to draw any conclusions about whether any particular future application for approval to export LNG is, or is not, in the public interest. The Study provides information and modeled projections on how different levels of U.S. LNG exports may affect certain considerations that may bear on a public interest determination, including effects on domestic U.S. natural gas prices, overall U.S. GDP, U.S. and global GHG emissions, international energy security, and localized environmental impacts such as those associated with production and liquefaction of LNG. Some of the Study’s conclusions are favorable to those seeking to increase U.S. LNG export volumes, and some are unfavorable. But the Study does not (and could not) take a position on how any particular administration should weigh that information in deciding whether a specific proposed export to a non-free-trade country would be in the public interest. The public interest standard is a flexible one, that confers considerable discretion on DOE about which factors to consider and how to weigh competing considerations in making an ultimate decision to approve or reject an export application. To be sure, the Study presents a set of data and scenarios attempting to model future impacts, that DOE will need to grapple with in making future export determinations, and a failure to acknowledge or address the Study’s conclusions would likely increase the litigation risk associated with an export approval or disapproval. But nothing in the Study should foreclose DOE from authorizing additional exports, so long as it provides a reasoned explanation for doing so, engages with the data and information in the Study, and explains how it weighed the various factors.

Second, as the above summary suggests, the Study’s conclusions are based on certain analytical assumptions and methodological approaches, some of which are controversial or at minimum subject to dispute. The Study does not meaningfully account for or address certain issues that might be material to future agency decisionmakers, such as the climate and other benefits associated with natural gas displacing higher-emitting fuels such as coal or liquids in electricity generation, the effects of minimization and mitigation measures to control environmental effects of increased LNG exports, and whether U.S.-produced LNG is more environmentally protective than LNG produced in other countries. These gaps in the Study’s approach can be understood to skew the Study’s bottom-line conclusions in a way that renders its data less useful (or even not useful) for future agency decisionmakers assessing a particular public interest determination. Future agency decisionmakers could identify these methodological issues or gaps in explaining what weight they give to the Study’s analysis and predictions.

Third, and relatedly, even if DOE were to make no changes to the Study following conclusion of the comment period and consideration of comments submitted, agency decisionmakers would retain the freedom to disagree with the Study’s results, so long as they provide a reasoned and defensible basis for doing so. That said, if DOE chooses to leave the Study “in place” without any changes, it will be important for the agency to “show its work” in taking action on future export authorizations, to explain what weight it gave to the Study’s conclusions and why, to justify any areas of disagreement, and to substantiate its own positions, whether based on the existing data, or if that data is rejected, providing a reasoned basis for doing so.

Fourth, and as noted above, because DOE opened a public comment period that will extend past the change of administration, it is not at all implausible to expect that the incoming Trump administration may use those comments as a springboard to making changes to the Study, or potentially even withdrawing it entirely. To be sure, mere “withdrawal” of the Study would not be an automatic fix; the agency would ideally provide a reasoned explanation for why it was withdrawing the Study or for any changes being made to its analysis or conclusions. The mere ministerial act of withdrawal would not prevent future litigants from relying on the Study (which will remain a part of the public record) in challenging future export approvals, as an indication of the “state of the science” and how DOE experts previously viewed the issues. Any effort by the incoming Trump administration to withdraw or discredit the study could be criticized by those seeking to discourage additional U.S. LNG export volumes. Given the possibility of litigation over future Trump administration actions in this area, it will be important for the agency to explain whatever actions it takes regarding the Study, and to provide defensible analysis or reasoning for rejecting or withdrawing the Study.

Given the potential significance of the Study for future DOE actions in this area, stakeholders should consider submitting comments that identify areas of agreement or disagreement with the DOE’s analysis, and to recommend changes that DOE could make to the Study’s approach or analysis.

¹ The Study used (1) the Global Change Analysis Model developed and maintained by Pacific Northwest National Laboratory’s Joint Global Change Research Institute; (2) the National Energy Modeling System (“NEMS”) develop by the Energy Information Administration and modified by OnLocation, Inc. for the Study; (3) the Household Energy Impact Distribution Model (“HEIDM”) developed by the International Electrotechnical Commission; and (4) the natural gas system life cycle assessment model developed by the National Energy Technology Laboratory.  More information about the models can be found in the Study’s addenda.

² The monetary amounts were based on the value of the U.S. Dollar in 2022 and discounted at three percent.

³ The monetary amounts were based on the value of the U.S. Dollar in 2022.

⁴ Hannah Ritchie and Pablo Rosado, Electricity Mix, Our World in Data (July 2020, revised Jan. 2024), https://ourworldindata.org/electricity-mix.

⁵ The Study was published in the Federal Register on December 20, 2024.