2022 Will Be Remembered as the Year the U.S. Became the World’s Largest Exporter of Liquified Natural Gas

As environmentalists look ahead to 2022, they may remember it as the year the United States finally passed major climate change legislation. Some advocates worry that this significant victory reverses a long-term trend that accelerated when this legislation — the Lower Inflation Act — was being debated.

In the first half of the year, the United States became the world’s largest exporter of liquefied natural gas, or LNG. Then, in September, crude oil exports peaked when the country shipped 4 million barrels a day abroad.

The boom in crude oil and natural gas exports has been supported by a bipartisan consensus that has spanned three successive presidential administrations, each of which has viewed energy exports as a foreign policy lever. More importantly, it is the culmination of a sustained campaign by the oil industry, which has increased production even as domestic demand for its fuel threatens to fall.

“This is all about industry demanding a role in the future,” said Josh Axelrod, senior environmental program advocate at the Natural Resources Defense Council. He noted that domestic gasoline consumption has leveled off or even started to decline, and natural gas use is expected to follow suit soon. “There is no oil growth in the U.S. market,” Axelrod said, “so providing export destinations and opportunities is one of their many tactics to stay active and grow even as climate change worsens.”

In the first nine months of 2022, the United States exported about 30 percent of its crude oil production and more than 15 percent of its natural gas, according to the Energy Information Administration, up from just a fraction a decade ago. (Because of the nature of US refineries, the country continued to import oil and oil products just as much as it exported.)

Export growth is expected to continue for years. In the final months of 2022, the Biden administration approved the construction of the nation’s largest oil export terminal and another LNG export terminal, scheduled to open in late 2025. Seven liquefied gas export terminals are now operational and three more are under construction.

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These export projects are clustered along the Gulf Coast of Louisiana and Texas, many of them in communities with high percentages of black and Latino residents, and a concentration of already polluting oil and gas terminals and petrochemical plants.

“These communities don’t need this anymore,” said Roychetta Ozan, an environmental group organizer for Bay Health in southwest Louisiana and southeast Texas. Ozane is home to two LNG terminals about 30 miles apart, and several chemical plants much closer. He said his situation often includes low-income communities and people of color.

US oil and gas exports are growing

Ozane noted that the Biden administration is aiming for net-zero greenhouse gas emissions by 2050, but is approving new LNG terminals that will take decades to operate.

“How is this going to net zero emissions?” Ozan said.

The increase in fossil fuel exports will at least partially offset some of the domestic emissions expected as a result of the Cut Inflation Act, the Climate, Tax and Health Care Act passed in August. LNG terminals are a big polluter, independent of the emissions produced when gas is burned in power plants or homes, because it requires energy to liquefy natural gas by cooling it to minus 260 degrees. According to the Environmental Protection Agency, Sabine Pass, the nation’s largest terminal, emitted 5.6 million metric tons of carbon dioxide in 2021, equivalent to about 1.5 average-sized coal-fired power plants.

It is more difficult to calculate the impact of the operation of these terminals on global emissions. Gas companies argue that LNG exports can reduce global emissions if they help replace coal-fired power plants overseas.

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Scott Lauermann, spokesman for the American Petroleum Institute, said: “Increasing geopolitical and market instability has led to an increase in global demand for American energy.” “With U.S. LNG exports, we have the opportunity to strengthen the energy security of allies and accelerate environmental progress with American natural gas.”

But a 2020 study by the Natural Resources Defense Council said the gains from LNG are modest at best. It found that exporting LNG from the US to Europe or Asia and using it to generate electricity would emit only about 30 percent more greenhouse gases than burning coal over a 20-year period.

Samantha Gross, director of the Energy Security and Climate Initiative at the Brookings Institution in Washington, said there was no doubt that exports would increase emissions in the US, but argued that it would be offset by declines elsewhere. He said that if countries don’t buy oil or gas from the US, they will buy it from another country.

“The world has a lot of oil and gas,” Gross said.

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Gross said U.S. gas exports are helping European countries wean off Russian gas in the short term, but Europe and the Biden administration are struggling today to increase supplies while maintaining their long-term goal of reducing emissions.

“We want fossil fuels in the short term, but we don’t want them in the long term,” he said. “And we can’t figure out how to put those two pieces together.”

White House Press Secretary Nicholas Conger said in an email: “We are taking steps to help partners recover from this acute energy shock. But this case also highlights the need to improve energy efficiency, diversify suppliers and transition to clean energy as quickly as possible. As the President noted, ultimately, real energy security requires a rapid global transition to clean energy, which is why we are making historic investments today in the deployment of clean energy and technologies that will enable the future.

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Some environmentalists say the gas industry is using the energy crisis caused by Russia’s invasion of Ukraine to build terminals and sign contracts that will keep the fossil fuel flowing for decades. An LNG terminal approved today, for example, will remain offline for many years and will continue to operate well past mid-century.

“President Biden clearly has a blind spot when it comes to LNG,” said Lucas Ross, program manager for the advocacy group Friends of the Earth. “What if the US benefits from a carbon-free energy sector by 2035?”

The growth in export potential appears to reinforce the difficult situation for Biden or any US president trying to accelerate the global transition to clean energy. The United States is now the world’s largest producer of oil and gas, and production is expected to grow, not decline.

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