Natural-gas exports have virtually no effect on climate change, even according to the EPA’s methodology.
Even the EPA's own methodology indicates this regulation would have essentially no impact on the climate.
S hould you doubt the magnitude of the Biden administration’s ideological crusade against fossil fuels, merely consider the recent reports that the Department of Energy is considering the addition of a “climate test” criterion for approval of export facilities for liquefied natural gas (LNG). This would be in addition to the politicized “public interest” analysis to which such proposals have been subjected until now, yielding delay and uncertainty for industry and full employment for bureaucrats.
Put aside the reality that fossil-fuel resources are an important form of national wealth, the production of which increases economic growth, individual incomes, and wages, reduces poverty, and yields revenues for federal, state, and local programs. Moreover, that increased national wealth allows for an expansion of efforts to improve environmental quality. And ignore the obvious truth that the imposition of additional constraints on LNG exports will make Europe and others more dependent upon the Putin regime for energy supplies, not a salutary outcome for U.S. foreign-policy interests.
Consider instead the basic climate question: What effect on future climate phenomena, as predicted by the Environmental Protection Agency climate model, would proposed U.S. LNG-export projects yield over, say, the course of this century?
Suppose that all U.S. LNG exports were to be prohibited — the existing export terminals would be shut down and no new ones would be approved — and assume that there would be no overseas increase in LNG production to compensate. Total U.S. LNG exports in 2022 were 3,865.6 billion cubic feet (bcf). The transport and the consumption of that volume of LNG annually would emit about 225 million metric tons (mmt) of greenhouse gases (on a CO2-equivalent basis).
Let us round that up to 300 mmt. The EPA climate model, under assumptions that exaggerate significantly the future temperature effects of reduced emissions, predicts that global temperatures by 2100 would be lower by 0.013°C. That is one-tenth the normal year-to-year variation in temperatures, and so would not be detectable. If we apply assumptions consistent with findings reported in the modern peer-reviewed literature, the temperature effect would be less than 0.008°C. (The entire Biden net-zero policy: 0.104°C. The entire Paris agreement: 0.142°C.)
One central object of controversy is the proposed new LNG-export terminal in Louisiana that would export 974 bcf of natural gas annually, resulting in annual GHG emissions of 57 mmt. Using the same analytic approach, the temperature effect of that project by 2100 would be less than 0.001°C. The leftist characterization of the Louisiana project as a “carbon bomb” — merely one example among myriad apocalyptic warnings — is political propaganda devoid of analytic content.
Without those additional LNG supplies from the U.S., it is reasonable to predict that international LNG prices would rise, leading to some substitution of non-U.S. LNG and both U.S. and non-U.S. coal in place of the U.S. LNG no longer available. The greater the degree to which non-U.S. LNG replaces U.S. LNG no longer exported, the greater the degree to which the regulatory “climate test” becomes trivial. And we would expect some international substitution of coal. GHG emissions from coal are almost double those of natural gas, making the “climate test” exercise sillier still.
Beyond ideology, interest-group politics are driving the “climate-test” nonsense. Large industries consuming natural gas have convinced themselves that restrictions on LNG exports will reduce the prices they have to pay for gas. Except perhaps in the short term, this is a delusion. Such restrictions will harm incentives for investment in natural-gas production, yielding higher domestic prices that would be observed quickly.
Fewer LNG exports, other factors held constant, will weaken the dollar, resulting in more exports from other sectors, and higher prices for other inputs used by the industries seeking this favoritism from the federal government. That would mean increased costs showing up in all sorts of unexpected places.
That’s a high price to pay for a climate impact essentially equal to zero.