Photo by Alexander Hamilton II
In the past year, as we have witnessed Russia’s brutal assault on Ukraine, the fossil fuel industry has seized upon the global supply crunch to reap short-term profits and lock in fossil fuel dependence. A prime example of this is the industry’s attempts to expand liquefied methane gas (LNG) exports. The rapid acceleration of LNG facility buildout in 2022 is no coincidence; it is the result of a concerted campaign by the gas industry to exploit war and suffering to line fossil fuel executives’ pockets at the expense of frontline communities, consumers, and the climate.
Last year, the Biden Administration promoted LNG while industry profited
In 2022, the US became the world’s #1 LNG exporter, driven by exports from 8 giant liquefaction facilities. Meanwhile, several of the more than 20 additional proposed projects came closer to construction. Two additional US LNG export projects reached financial closure when they previously seemed far from economically viable. The Federal Energy Regulatory Commission (FERC) approved its first LNG export facility in 2.5 years, despite evidence of significant environmental justice impacts. And Biden Administration officials continued to promote LNG publicly and behind closed doors, despite its incompatibility with the Administration’s climate and environmental justice goals.
We saw a pattern of back-room diplomacy and commercial support to negotiate overseas contracts for US LNG, an essential precondition for investment given the price-tag of these terminals. For example, in early April 2022, the US Embassy in Germany hosted a multi-day meeting with LNG suppliers. In September of last year, the US Commerce Department provided overseas commercial support to US LNG companies at the Gastech conference in Milan, Italy. Later, in October, the US Embassy in Japan hosted the ‘Alaska LNG Summit,’ an effort to broker deals with Japanese companies for the environmentally disastrous Alaska LNG project. Just last week, the US State Department met with Montenegro
Meanwhile, the oil and gas industry reaped the rewards. In 2022, the 5 biggest oil majors’ profits reached $190 billion, nearly 50% higher than the previous record in 2011. LNG companies benefited too; for instance, Cheniere, the US’ biggest LNG exporter, increased earnings by $3.8 billion in the first six months of 2022.
There’s a connection between the two: LNG companies have waged a concerted campaign to influence the Administration. Immediately following Russia’s invasion of Ukraine, the gas lobby group LNG Allies presented a list of demands to the Administration to expand LNG production and exports. Among other items, the LNG lobbyists asked for a “EU-U.S. Emergency Energy Infrastructure Council” to promote LNG exports; the governments announced the US-EU task force on energy security shortly thereafter, led on the US side by Amos Hochstein, a senior State Department official and Biden aide who previously worked for LNG company Tellurian. In June, Exxon CEO bragged that he was “in talks with the US government to accelerate the Golden Pass LNG project,” and earlier this month State Department Assistant Secretary Pyatt traveled to Houston to “meet with leaders of the Houston based energy industry.”
The industry’s timelines don’t match up
The industry’s narrative on LNG exports and international energy security is a false one. Existing US LNG export capacity has proven the ability to meet the gap created by the cutoff of Russian supply. In 2022, the US far surpassed its commitment to provide an additional 15 billion cubic meters of LNG for Europe. Thanks to US supply, as well as European countries’ foresight, as of December 31st European gas storage was at a comfortable 83.5%. Europe has made it abundantly clear that it is committed to making the transition to renewable energy and the need for additional fossil fuel supplies – including US LNG – is only short term.
But LNG export facilities are massive infrastructure projects. They cost an average of over $5 billion and take 3-5 years to build once they reach final investment decision (closer to 8 years from project inception). Gas companies are disingenuous when they say their goal is to meet Europe’s current needs. In fact, projects approved today likely wouldn’t be operational until close to 2030, by which point Europe has committed to reducing gas consumption by 30%, a target they recommitted to in the REPower EU plan. Because they require so much time and money, LNG facilities are meant to be operated for 20, 30, 40 years – locking in decades of climate pollution.
We can’t afford expanded LNG exports
LNG is primarily composed of methane, a greenhouse gas that is 80x more potent than carbon dioxide. The majority of US gas for export is fracked, polluting local air and water. It then travels through pipelines, where methane leaks poison local communities and fuel disastrous climate change. Finally, the gas reaches giant facilities, mainly located along the Gulf Coast of Texas and Louisiana, where it is supercooled to a liquid form at -260F and loaded onto tankers to be sent overseas.
The majority of existing and planned LNG terminals are located alongside low-income communities of color that are already overburdened by pollution and bear the brunt of climate change fueled natural disasters. Gas liquefaction releases pollutants that are known to cause respiratory disease and cancer, and export facilities destroy the coastal ecosystems communities depend on for livelihoods and flood protection. And LNG export facilities are dangerous, as we saw when Freeport LNG exploded last June.
If all of the new and proposed facilities were built, annual lifecycle emissions from US LNG exports would be equivalent to 661 coal plants or 532 million cars, according to Sierra Club research. This would blow through global carbon budgets and make meeting US climate pledges – including our NDC to reduce emissions 50-52% by 2030 – impossible to meet.
What’s more, as LNG exports increase, average Americans suffer from higher electricity, heating, and cooking prices. There is mounting evidence of the direct connection between increased LNG exports and higher domestic energy prices, as evidenced by the rise in domestic gas prices on recent news of Freeport LNG’s reopening.
It’s not too late to change course
The US is already the world’s largest LNG exporter, but proposed projects would nearly quadruple our LNG export capacity – creating impacts magnitudes larger than those we are already seeing.
We cannot afford to allow big gas to continue to preach a false gospel and reap record profits as the climate, global economy, and frontline communities suffer the impacts. There is an alternative – we can cooperate with our allies to accelerate the clean energy transition, achieving true energy security that is not subject to volatile markets and geopolitical strife. The Biden Administration and Democrats in Congress are making important progress towards this future through game-changing investments like those in the IRA. But we need the political will to move away from increasing our dependence on fossil fuels, and expanded LNG exports have no place in a secure or sustainable energy future.