Natural Gas Exports Ban Makes Little Sense for Environment

Mark Green
Posted November 1, 2019

The U.S. as a global leader in natural gas exports is underlined by a new government report showing that through the first six months of this year, U.S. net natural gas exports averaged 4.1 billion cubic feet per day (Bcf/d) – more than doubling 2018’s average net exports. This follows analysis that the U.S. became a net exporter of natural gas on an annual basis for the first time in 60 years in 2017.

These figures are significant for a number of reasons:

First, they attest to the strength of domestic natural gas production, which continues to set records – largely thanks to shale production enabled by safe hydraulic fracturing. Below, the U.S. Energy Information Administration’s (EIA) chart on gross withdrawals, showing the rapid trajectory of production since 2007 (the approximate launch of the U.S. energy revolution):

Second, expanding markets for U.S. natural gas helps support more domestic production – which means jobs, investments and other economic growth.

Third, growing exports of clean natural gas means other nations may realize the environmental benefits from increased use of natural gas. We’ve seen it in the U.S.: America’s energy-related emissions of carbon dioxide, an important greenhouse gas, are at their lowest levels in a generation, mostly because more and more natural gas is fueling U.S. power generation.

EIA notes that U.S. exports include natural gas pipelined to Canada and Mexico and liquefied natural gas (LNG) shipped to other countries. U.S. LNG export capacity continues to grow. EIA says total U.S. LNG exports the first half of this year were 37% higher than the same period last year, reaching 5.4 Bcf/d capacity across four facilities and nine liquefaction trains. More liquefaction units have come online the second half of this year, and U.S. LNG export capacity will reach 8.9 Bcf/d by the end of 2020, EIA says. This chart shows monthly growth in U.S. LNG trade:

Great news, right? Well, not for a number of the Democrats running for president who’ve called for banning U.S. natural gas and oil exports. They apparently don’t care much about points one and two above, but they should care about what an export ban would mean for point No. 3 – the environmental benefits of natural gas.

Ironically, advocating a ban on exports – for the sake of environmental and climate progress – could actually work against those goals. An International Energy Agency report on the growing energy demand in Southeast Asia (a key energy export market) shows this.

IEA says the region’s increased energy needs, driven by economic and population growth, will bring increased use of coal for power and result in a 60% rise in CO₂ emissions. Southeast Asia is ripe for natural gas imports – IEA says it will be a net natural gas importer in the late 2020s – and the U.S. could and should be a major supplier there.

But it won’t be if natural gas exports are banned. And the broader result could be less natural gas for the global market, leading to higher LNG prices that end up boosting coal power.

Now, we realize that some believe banning U.S. natural gas exports would allow renewable energy to fill in. But coal clearly is still growing and projected to grow in parts of the world, like Southeast Asia. So, while invoking the environment and climate, opponents of natural gas exports could enable more coal use and higher CO₂ emissions worldwide.

Nope, it doesn’t make much sense.