LNG Exports Impact Energy Prices, Economy, and Emissions: Insights from DOE Study
In December 2024, the U.S. Department of Energy (DOE) released a comprehensive multi-volume study evaluating the far-reaching world-wide impacts of liquefied natural gas (LNG) exports. With the U.S. now the world’s top LNG exporter, DOE’s analysis provides a timely and comprehensive look at how this leading position affects both domestic and global markets. A critical component of this study is “Appendix B: Domestic Energy, Economic, and GHG Assessment of U.S. LNG Exports,” prepared by OnLocation (a Division of KeyLogic) and Industrial Economics, Inc. (IEc). The Appendix offers a detailed examination of how increasing U.S. LNG exports could affect domestic natural gas markets, the broader economy, and household energy burdens, helping to assess the various facets of the public interest that are affected by U.S. LNG exports. The study offers timely insights, particularly given the Trump administration’s deregulatory approach in reshaping the U.S. energy landscape through supporting fossil fuel development, expanding domestic production and leveraging U.S. energy exports as a tool of geopolitical and economic influence.
Scenario Design and Modeling Framework
OnLocation conducted the U.S. domestic analysis using our customized version of the U.S. Energy Information Administration (EIA’s) National Energy Modeling System (NEMS). OnLocation developed and ran this version of NEMS to project the impacts of various U.S. LNG export levels on national energy production, prices, and gross domestic product (GDP). The modeled changes in energy prices combined with population data were then used within IEc’s Household Energy Impact Distribution Model (HEIDM) model to provide estimates of the energy cost impact on consumers.
The domestic study assessed six scenarios all under the “Defined Policies” global climate assumption (summarized in Table 1) using a combination of:
- U.S. LNG export levels: either constrained to currently operating or approved facilities as 23.7 Bcf/d (called the Existing/FID Exports level) or unconstrained U.S. LNG exports where the exports level increases to 56.3 Bcf/d by 2050 based on modeled global demand (called the Model Resolved level, determined by GCAM), as shown in Figure 1.
- U.S. supply assumptions: representing reference, high or low natural gas resource availability. For this, OnLocation followed the assumptions used in Annual Energy Outlook 2023 (AEO 2023) for reference oil and gas supply and its side cases for high and low oil and gas supply (where estimated ultimate recovery per well and rates of technological improvement are adjusted accordingly.
Table 1. Considered scenarios for Appendix B of the LNG study
| U.S. Supply Assumption | U.S. LNG Exports Level | U.S. LNG Export Volumes (Bcf/d) |
|---|---|---|
| Reference | Model Resolved | 56.3 Bcf/d by 2050, based on GCAM |
| Existing/FID Exports | Maximum of 23.7 Bcf/d | |
| High U.S. Supply | Model Resolved | 56.3 Bcf/d by 2050, based on GCAM |
| Existing/FID Exports | Maximum of 23.7 Bcf/d | |
| Low U.S. Supply | Model Resolved | 56.3 Bcf/d by 2050, based on GCAM |
| Existing/FID Exports | Maximum of 23.7 Bcf/d |
Figure 1. U.S. LNG exports (Billion cubic feet/day) with Model Resolved and Existing/FID Exports levels
Key Findings on Domestic Impacts
Natural Gas Prices Are Projected to Rise with Export Growth
- The price of natural gas at the Henry Hub in Louisiana, a main trading hub for natural gas in the U.S., increases in scenarios where the export level is unconstrained (increasing to 56.3 Bcf/d by 2050) compared with existing and FID levels of U.S. LNG exports. The 2050 Henry Hub natural gas price is projected to increase 31% in response to higher LNG exports with reference U.S. supply assumptions.
- Residential natural gas prices increase more modestly (compared to wholesale prices such as those at Henry Hub) in response to increased LNG exports. Using reference U.S. supply assumptions, residential natural gas prices are 4% higher in 2050 in response to the higher LNG exports. As the commodity price is only a portion of the delivered gas price for the residential sector, changes in the commodity price (e.g. in Henry Hub price) yield smaller proportional changes in the overall gas price for the residential sector.
Economic Gains from Expanded LNG Activity
- Despite higher energy costs, the study projects an economic boost from rising LNG exports. Increased upstream activity in oil and gas extraction fuels growth in industrial output. By 2050, industrial output increases by up to 1.3% ($203 billion), with oil and gas extraction contributing 72% of that gain.
- Increased LNG exports also contribute to higher GDP. Driven by higher upstream investments, increased LNG exports stimulate a 0.2% ($80 billion) increase in 2050 GDP, with a $410 billion cumulative GDP increase from 2020 to 2050 under the reference U.S. supply assumption.
Household Energy Burdens Rise with Export Growth
- Higher LNG exports result in higher annual energy expenditure per household. On average, natural gas households may pay up to $46.52/year more for natural gas (up to 0.24% of average annual income) by 2050. In addition, there is an average increase per year of up to $118.37 for electricity expenditures across all households (up to 0.5% of average annual income).
- On average, there is up to $122.54 annual increase for natural gas plus electricity expenditure across all households (with average household expenditure impacts up to 0.50% of average annual income).
Domestic Emissions Increase with Export Growth
- Domestic energy-related CO₂ emissions increase by 1–2% in 2050 across scenarios in response to higher LNG exports, primarily from expanded production, transportation, and liquefaction of natural gas for export.
Final Thoughts
Across all scenarios, this study confirms that the U.S. natural gas supply is robust enough to support rising global demand for U.S. LNG while continuing to meet domestic demand and providing measurable economic gains. These benefits come with trade-offs such as higher domestic energy prices and household expenditures. As the U.S. continues to shape its role in global energy markets, this study offers a valuable foundation to assess economic opportunities associated with LNG exports, considering its impacts on consumer affordability and energy security.