New Analysis: Americans Benefit from Low Natural Gas Prices as U.S. Leads World in LNG
Rob Jennings
Posted March 20, 2024
New analysis confirms what we’ve been saying – that American families have benefited from some of the lowest residential natural gas prices in the world, even as the U.S. has become the global leader in delivering liquefied natural gas (LNG) to allies abroad.
The point is significant, because one of the Biden administration’s justifications for freezing LNG permitting is concern over domestic natural gas prices. A new study by Energy Ventures Analysis, on behalf of API, adds to the fact base that says otherwise.
In fact, America’s natural gas producers have shown time and again they can keep the domestic market well-supplied – benefiting Americans with stable, affordable prices, jobs and economic growth – while also supporting our country’s allies by sending them LNG. On the other hand, the administration’s LNG freeze risks stunting those job and economic growth benefits, as well as America’s commitments to allies.
Dustin Meyer, API senior vice president of Policy, Economics and Regulatory Affairs:
“The administration’s misguided LNG freeze threatens American jobs and jeopardizes global energy security.”
Key points in the Energy Ventures Analysis study:
- 54% lower prices – Over the past decade, average Henry Hub natural gas prices in the U.S. were 54% lower than in the decade before it – thanks to the shale revolution that launched an era of surging American natural gas production.
- Low prices and LNG – Even as America reached a record level of LNG exports over the first six months of 2023, U.S. natural gas prices at Henry Hub were at the lowest six-month average in more than 35 years (outside of the COVID-19 pandemic)
- Production surge – Since 2016, the increase in American natural gas production has more than doubled the increase in LNG shipments. While LNG deliveries have increased by about 14 billion cubic feet per day (Bcf/d), domestic natural gas production has increased by 31 Bcf/d to help ensure a well-supplied market for American consumers.
- Supply response – Over the past 15 years, any meaningful increase in natural gas demand – from the industrial, electric power or export sectors – has been accompanied by a production increase, helping maintain affordability for American families and businesses.
API executives and member company leaders urged the White House to reverse the freeze on permits at CERAWeek, the energy conference happening this week in Houston.
ConocoPhillips CEO Ryan Lance:
#LNG prices low because of policies finalized years ago per @conocophillips Ryan Lance. New @APIenergy study validates this trend. @ENERGY #LNG export freeze is “sowing the seeds” of future challenges and has a lot of “political overtones “, Lance adds. https://t.co/F4hxWAbM7u pic.twitter.com/0Ps9lxQXkz
— Megan Barnett Bloomgren (@MeganBloomgren) March 19, 2024
API President and CEO Mike Sommers:
API’s @MJ_Sommers: “We’ve actually seen a decline in price as a consequence of opening up new markets for American natural #gas.”
— American Petroleum Institute (@APIenergy) March 19, 2024
Learn more:
“New Report: American Natural Gas Prices Stand Among World’s Lowest Amid Record US LNG Exports”#CERAWeekhttps://t.co/gcU5AruBGI pic.twitter.com/sBkNnGK4Wv
Cheniere CEO Jack Fusco:
@Cheniere: This will be the fourth time @ENERGY has studied #LNG exports … we look forward to reviewing their analysis in line with the last eight years of empirical market evidence - both environmental (move from coal to cleaner gas) and economic (lower prices). #CERAweek2024 pic.twitter.com/93ngm2o18O
— Megan Barnett Bloomgren (@MeganBloomgren) March 18, 2024
More from Meyer, a natural gas expert:
“If policymakers are truly committed to energy affordability, they should focus on smart policies that remove hurdles to increasing natural gas production and developing critical infrastructure.”
Hopefully, that message is breaking through. Yesterday, at a CERAWeek luncheon, Secretary of Energy Jennifer Granholm predicted the pause would be “in the rearview” by this time next year.
Venture Global CEO Mike Sabel implied that it may come sooner than that. American families and businesses who appreciate reliable, affordable energy – not to mention our allies abroad – can only hope.
.@VentureGlobal CEO Mike Sabel says he’s “confident” Energy Department review of U.S. #LNG will recognize its critical role in supporting U.S. allies and enabling global climate progress. #CERAWeek pic.twitter.com/Fw0j7aEmoL
— American Petroleum Institute (@APIenergy) March 19, 2024
About The Author
Rob Jennings is the Vice President of Natural Gas Markets at the American Petroleum Institute. He leads API's efforts on natural gas and LNG issues, as well as emerging technologies including certified natural gas, hydrogen and carbon capture and sequestration. He engages with policymakers, regulators and other stakeholders to communicate the many environmental, economic and energy security benefits of natural gas not only to the U.S. but also to importing countries, with an emphasis on the role it can play in a lower carbon future. Prior to joining API in 2021, Rob spent nearly 10 years in power and gas market consulting at Energy Ventures Analysis, Inc. He holds a Bachelor’s degree from James Madison University.