“America First”…by selling U.S. energy overseas?
Trump’s call for “energy dominance” was a frequent talking point for the president’s first administration as well, but his ongoing quest seems to dismiss the record growth in energy production that ensued over the past four years. Under President Joe Biden, domestic production overall of crude oil, natural gas, and electricity rose, respectively, 17 percent, 11 percent, and 9 percent. Meanwhile, liquefied natural gas (LNG) export capacity is on track to more than double by 2028, from 2024.
“Since 2016, we’ve become number one in LNG exports in less than 10 years’ time,” says Giannetti.
And just who is buying all the fuel we export? There aren’t loads of takers. After all, as Giannetti points out, “international markets are not facing an energy emergency either.” China is the single-biggest purchaser of American LNG—but often resells it at a profit. Beyond the exports that the United States supplies, our trading partners in Europe have also made changes to lessen their dependence on foreign imports.
The war in Ukraine, for example, was a major wake-up call to the West about the need to be more energy independent and to cut ties to Russia, a huge exporter of crude oil and natural gas. A solar boom ensued across Europe, and according to the European Investment Bank, the continent now spends 10 times more investing in clean energy than it does in fossil fuels.
And building more LNG terminals—as the gas industry is pushing for (in Gibbstown, New Jersey, in Southwest Louisiana, in the Gulf of California)—won’t benefit American pocketbooks either. Econ 101 tells us that through the law of supply and demand, reducing domestic reserves by shipping more overseas will increase prices at home. And a recent U.S. Department of Energy (DOE) report confirms it.
The report, commissioned to ensure LNG export reviews are compliant with the law, explains how more LNG terminals are not in the public interest. In addition to driving significant methane emissions, exacerbating the climate crisis, and harming frontline communities, “higher U.S. LNG export levels in 2050,” the report concludes, “are associated with higher U.S. residential natural gas prices.”
Of course, the gas industry has its own motivations for finding more international buyers for its products while simultaneously putting pressure on domestic markets. “Natural gas is cheap relative to other fuel sources,” says Giannetti, “and it has been too cheap for the gas industry for a while. There were a couple of points just before COVID where its price was actually negative on the Henry Hub index, because there was so much.” Indeed, a mild winter combined with continued production growth contributed to especially high gas inventories by the end of the 2019–2020 heating season—a surplus that certainly didn’t benefit industry.
