Here’s why LNG exports are bad for you as a citizen of the United States

Even at this late date, I still run into people are wary of the LNG export potential of pipelines like PennEast. And for those who believe LNG export is a real thing, there’s a contingent that believe exports will be a net positive for people living here in the U.S. And doubly so for us living in the North East.

In reality LNG exports benefit only the fossil fuel companies. The rest of us will suffer grave environmental and economic damage if this is allowed to happen.

A report from explains exactly why this is so. You can read the full report here:

As I’ve mentioned in this space before, LNG exports will not serve to lower prices here in the U.S. Oh no! Quite to the contrary, LNG exports will open up a new category of competition against domestic consumers. And this new competition is happy to pay 4x what we pay for natural gas in the U.S.

Economic theory tells us when changes like this happen in a market, prices seek to reach a new equilibrium point. In this case prices in markets such as India, Asia, and Europe will go down.

Meanwhile – prices here in the U.S. will increase.

What I didn’t realize is how steep the increase will be.

According to the government figures, LNG exports will result in a 14% to 36% increase in domestic natural prices at the wellhead. The impact to consumers will be felt as a 3-9% increase in our natural gas bills, followed by an additional 1%-3% increase in our electrical bills. The exact amount depends on how quickly the industry moves to exports. The slower the go the slower the increase. And of course, the flip side is true: the faster they go, the steeper the rise and the more quickly we’ll see it.

This is not only bad for us; it’s bad for the environment too. One obvious impact is the number of export terminals that will have to be built to support all this LNG export. A secondary one is the number of pipelines that will have to be built to satisfy this new demand. And, the icing on the cake is that natural gas prices here in the U.S. will rise to the point where they are no longer competitive with coal, and as such electrical generation plants will prefer to burn coal over natural gas.

Every one will benefit in this scenario! The frackers drilling in PA, the pipeline operators, the LNG export people, consumers in India and Japan and Europe. Natural gas producers will see an increase of $14 billion and $32 billion in revenue from this so they’ll certainly be benefit big time.

Oh, except for us. U.S. citizens will see their land polluted and their utility prices rise as a result of this. As will electrical generators, industrial users, and transportation users of natural gas here in the United States.

And so, for these reasons, companies like PennEast get to invoke eminent domain and steal our land “for the public good”.

Don’t take my word for it. Here is a summary of the report on page 14 of the PDF:


Increased natural gas exports lead to higher domestic natural gas prices, increased domestic natural gas
production, reduced domestic natural gas consumption, and increased natural gas imports from Canada
via pipeline.

• Increased natural gas exports lead to increased natural gas prices. Larger export levels lead to larger domestic price increases, while rapid increases in export levels lead to large initial price increases that moderate somewhat in a few years. Slower increases in export levels lead to more gradual price increases but eventually produce higher average prices during the decade between 2025 and 2035.

• Natural gas markets in the United States balance in response to increased natural gas exports largely through increased natural gas production. Increased natural gas production satisfies about 60 to 70 percent of the increase in natural gas exports, with a minor additional contribution from increased imports from Canada. Across most cases, about three-quarters of this increased production is from shale sources.

• The remaining portion is supplied by natural gas that would have been consumed domestically if not for the higher prices. The electric power sector accounts for the majority of the decrease in delivered natural gas. Due to higher prices, the electric power sector primarily shifts to coal-fired generation, and secondarily to renewable sources, though there is some decrease in total generation due to the higher price of natural gas. There is also a small reduction in natural gas use in all sectors from efficiency improvements and conservation.

• Even while consuming less, on average, consumers will see an increase in their natural gas and electricity expenditures. On average, from 2015 to 2035, natural gas bills paid by end-use consumers in the residential, commercial, and industrial sectors combined increase 3 to 9 percent over a comparable baseline case with no exports, depending on the export scenario and case, while increases in electricity bills paid by end-use customers range from 1 to 3 percent. In the rapid growth cases, the increase is notably greater in the early years relative to the later years. The slower export growth cases tend to show natural gas bills increasing more towards the end of the projection period

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Mike Spille

I'm a thinker, an analyzer, a synthesizer. Maybe not in that order. I live in West Amwell NJ with my wife Kristina, our two kids Day and Z, our two dogs Fern and Cinna, and three cats Ponce de Leon, Oliver, and Doolittle.

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