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

When environmentalists look back on 2022, they might remember it as the year the United States finally passed a major climate change law. Some advocates worry, however, that this significant victory is being undermined by a long-term trend that accelerated while that law—the Inflation Reduction Act—was being negotiated.

In the first half of the year, the United States became the world’s top exporter of liquified natural gas, or LNG. Then, in September, crude oil exports hit an all-time high when the country sent abroad about 4 million barrels per day.

The sharp rise in crude oil and natural gas exports has been supported by a bipartisan consensus that has spanned three consecutive presidential administrations, each of which has viewed energy exports as a lever of foreign policy. More than anything, though, it is the culmination of a sustained campaign by the oil industry that has seen production soar even as domestic demand for its fuels threatens to decline.

“This is all about industry staking a claim to a future role,” said Josh Axelrod, senior advocate in the nature program at the Natural Resources Defense Council. Domestic gasoline consumption has plateaued or even begun to decline, he pointed out, and natural gas use is expected to do the same soon. “There’s no growth opportunity for oil in the U.S. market,” Axelrod said, “so securing export destinations and capacity is one of their many tactics to stay active and growing even as climate change gets worse.”

Over 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 Energy Information Administration data, up from a tiny fraction a decade ago. (Because of the nature of U.S. refineries, the nation continued to import oil and petroleum products, too, nearly as much as it exported.)

Exports are expected to continue climbing for years. In the final months of 2022, the Biden administration approved construction of what would be the nation’s largest oil export terminal, scheduled to begin operating at the end of 2025, and yet another LNG export terminal. There are now seven LNG export terminals operating, with three more under construction. 

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 that are already home to a concentration of polluting oil and gas terminals and petrochemical plants.

“These communities don’t need this anymore,” said Roishetta Ozane, a community organizer for southwest Louisiana and southeast Texas at Healthy Gulf, an environmental group. Ozane lives within about 30 miles of two LNG terminals and more that are proposed, with several chemical plants much closer. She said it is often low income communities and people of color who are in her situation.

Ozane noted that the Biden administration has a goal of reaching net-zero greenhouse gas emissions by 2050, yet is approving new LNG terminals that are expected to operate for decades.

“How is that headed toward net-zero emissions?” Ozane said.

The rise in fossil fuel exports will offset, at least partly, some of the domestic emissions reductions expected to come as a result of the Inflation Reduction Act, the climate, tax and health care bill enacted in August. LNG terminals are large polluters themselves, independent of the emissions generated by the gas when it is burned in power plants or homes, because of the energy required to liquify natural gas by cooling it to minus 260 degrees Fahrenheit. Sabine Pass, the nation’s largest terminal, emitted 5.6 million metric tons of carbon dioxide in 2021, about as much as 1.5 average-sized coal power plants, according to the Environmental Protection Agency.

The impacts of these terminals’ operations on global emissions is harder to calculate. Gas companies have argued that LNG exports can actually reduce global emissions if they help replace coal power plants overseas.

“Rising geopolitical and market instability has led to an increase in global demand for American energy,” said Scott Lauermann, a spokesperson for the American Petroleum Institute. “With U.S. LNG exports, we have the opportunity to both strengthen the energy security of allies and empower them to accelerate their own 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 United States to Europe or Asia, and using it to generate electricity, releases only about 30 percent fewer climate-warming gasses than burning coal, when compared over a 20-year period.

Samantha Gross, director of the energy security and climate initiative at the Brookings Institution, a think tank in Washington, D.C., said there’s no doubt that exports will drive emissions higher in the United States, but argued that would be offset by declines elsewhere. If countries don’t buy oil or gas from the United States, she said, they would simply buy it from another country.

“There’s plenty of oil and gas in the world,” Gross said.

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

“We’re in a weird moment where we want fossil fuels in the short-term, but we don’t want them in the long-term,” she said. “And we can’t figure out how to put those two pieces together.”

Nicholas Conger, a White House spokesman, said in an emailed statement: “We are taking steps to help partners navigate acute energy shocks. But this moment also illustrates the imperative to improve energy efficiency, diversify suppliers, and shift to clean energy as quickly as possible. As the President has underscored, ultimately, real energy security will require an accelerated global clean energy transition—which is why we are making historic investments in clean energy deployment today and in the technologies that will power the future.”

Some environmentalists say the gas industry is using the energy crisis sparked by Russia’s invasion of Ukraine to build terminals and sign contracts that will ensure fossil fuels continue to flow for decades. An LNG terminal that is approved today, for example, will not come online for years and could continue operating past the middle of the century. 

“President Biden has a clear blindspot when it comes to liquefied natural gas,” said Lukas Ross, a program manager at Friends of the Earth, an advocacy group. “What good is a carbon-free power sector by 2035 if the U.S. becomes even more of an exporting powerhouse?”

The rise in export capacity does appear to be cementing in place a difficult position for Biden or any American president trying to hasten a global transition to clean energy. The United States is now the world’s largest oil and gas producer by far, and output is expected to rise, not fall.