The projected boom in exports comes as Canadian, Mexican, and American projects come online and federal regulators approve first export permit in 7 months.
North American liquefied natural gas (LNG) exports, driven by record production in the United States, are projected to significantly expand over the next five years, according to a Sept. 3 Energy Information Administration (EIA) forecast.
“[North American LNG] export capacity is on track to more than double between 2024 and 2028, from 11.4 billion cubic feet per day (Bcf/d) in 2023 to 24.4 Bcf/d in 2028,” the report reads.
One billion cubic feet of LNG is equivalent to 178 million barrels of oil. According to Investopedia, 1 billion cubic feet is enough to satisfy “all of Delaware’s natural gas needs for slightly more than one week.”
The report notes that its projections are contingent on 10 projects currently under construction in Mexico, Canada, and the United States “beginning operations as planned.”
The EIA’s projections follow the Aug. 31 approval by the Department of Energy (DOE) of its first LNG export permit to a non-Free Trade Agreement (FTA) nation in the seven months since the Biden administration imposed a temporary pause on such applications and two months after a federal judge in Louisiana lifted the pause while it is being appealed.
In approving Houston-based New Fortress Energy’s LNG application, the DOE’s order states that the permit doesn’t increase the “total volume of LNG” that the company can export and increases U.S. LNG exports to non-FTA nations by 3 percent.
As of Aug. 30, the EIA reported that the DOE has approved 46.45 Bcf/d of natural gas exports in 2024, including 6.7 Bcf/d to Canada and Mexico as “re-exports” to non-FTA nations.
The United States has FTAs with 20 nations that permit LNG to be directly shipped from U.S. ports.
U.S. LNG to non-FTA nations—including the three biggest importers, South Korea, Japan, and China—is primarily shipped through Mexico.
The EIA estimates that by 2028, LNG export capacity will grow by 9.7 Bcf/d in the United States, 2.5 Bcf/d with three new terminals in Canada, and 0.6 Bcf/d from two projects in Mexico.
The five U.S. LNG projects cited by the EIA are Plaquemines (phases I and II), Corpus Christi (stage III), Golden Pass, Rio Grande (phase I), and Port Arthur (phase I).
In 2023, the United States became the world’s largest LNG exporter, shipping overseas an average of 11.4 Bcf/d, a 12 percent increase over 2022’s domestic LNG exports. LNG is fracked shale gas liquefied for transport.
According to the International Group of Liquefied Natural Gas Importers, the 11.4 Bcf/d in LNG that U.S. producers exported was 21 percent of the global 52.9 Bcf/d LNG market, which grew by 3.1 percent in 2023.
With expanded export and import capacities and increasing natural gas demand driving growth, analysts almost unanimously project sustained expansion in the global LNG market.
India-based Mordor Intelligence’s industry report forecasts that the global LNG market will grow to $103.41 billion by 2028 from $74.6 billion in 2023, a compound annual growth rate of 6.75 percent across the five-year forecast.
Approval Doesn’t Presage Avalanche
New Fortress Energy’s Fast LNG Altamira terminal off Mexico’s Gulf Coast is one of the 10 cited in EIA projections. The terminal will receive U.S.-produced LNG via Valley Crossing Pipeline.
In approving the New Fortress Energy (NFE) permit, the DOE stated that allowing exports to non-FTA countries gives the company flexibility in using its new terminal, which has been operational since July.
Under the authorization, NFE can export 1.4 million tons a year of LNG to “re-export” to non-FTA countries from Altamira for five years. The company wanted a permit through 2050. It largely exports to Brazil and Jamaica.
“These re-exports can diversify global LNG supplies and improve energy security for U.S. allies and trading partners,” the DOE said in the order, noting that authorization isn’t “inconsistent with the public interest.”
The department cautioned that green-lighting NFE’s permit doesn’t presage a general avalanche of approvals for projects pending since the federal government imposed its temporary pause on new non-FTA export applications on Jan. 26.
In justifying the freeze on new permit reviews, the White House stated that a study was needed to update factors used to evaluate LNG exports. Current standards do not adequately gauge “potential energy cost increases for American consumers and manufacturers,” nor “the impact of greenhouse gas emissions,” specifically methane, it stated.
President Joe Biden never set a deadline for completing the study, but DOE Secretary Jennifer Granholm said during spring/summer budget hearings that it would be finished by December and finalized in early 2025.
The odds that the study’s rule-making will materialize in the Federal Register will be determined by who is voted into the White House and Congress in November. If Republicans gain more control after the elections, those odds would be low.
In the meantime, a federal judge’s July 1 ruling makes the temporary pause moot by suspending its implementation until the study is complete.
U.S. Western District of Louisiana Judge James Cain Jr. agreed with Louisiana’s and 15 other states’ attorneys general who challenged the pause in a March lawsuit.
Praise, Rebuke, Litigation
NFE’s export permit was one of 14 in limbo under the pause, negatively affecting projects in Louisiana and Texas, House Republicans argued in 2023 and 2024 hearings.
The GOP-led chamber in 2023 adopted HR 1, which, among other things, prohibits a president from pausing LNG exports by executive order. The bill was never transmitted to the Democrat-controlled Senate.
Sierra Club’s U.S. LNG Export Tracker lists proposed terminal and pipeline projects across the three countries, including nearly 40 in various planning stages.
The American Gas Association, National Propane Gas Association, and American Petroleum Institute (API) are among industry groups praising the DOE’s NFE approval, with API in a Sept. 4 X post calling it “step one” in resuming support for “policies that advance U.S. energy leadership, not hinder it.”
“NFE is now able to freely supply cheaper and cleaner natural gas to underserved markets across the world and further our goal of accelerating the world’s energy transition,” NFE Chair and CEO Wes Edens said in a Sept. 3 statement.
The decision drew criticism from climate change groups citing an April Oxfam of America report that estimates that the 14 LNG export projects could emit the same amount of greenhouse gas as 532 coal plants.
Oil Change International said in a Sept. 3 statement, “No matter how much the United States invests in renewable energy, any additional [LNG] export infrastructure will undermine domestic and international efforts to prevent climate catastrophe.”
In a series of posts on social media platform X on Sept. 3, Oil Change International called NFE’s project “reckless,” noting that LNG is “made predominantly of methane, which has 80 times the planet-heating potential of carbon dioxide over its first two decades in the atmosphere.”
Mitch Jones, Food & Water Watch’s managing director of policy and litigation, said the authorization was “ridiculous.”
“[The DOE] is under no obligation to approve these ill-advised proposals, now or ever,” Jones said.
All groups vowed to continue fighting in the public square and the courts, a pledge immediately fulfilled with a Sept. 4 lawsuit lodged against the Federal Energy Regulatory Commission (FERC) for approving a Louisiana LNG project.
A Southern Environmental Law Center-led coalition argues in its suit filed in the District of Columbia’s U.S. District Court that Venture Global’s CP2 LNG project in Cameron Parish violates the Natural Gas Act, does not identify a public benefit, and would negatively affect Louisiana’s commercial fishing industry.
An Aug. 21 lawsuit filed in a district court in Louisiana by The Sierra Club made similar claims.
The project would connect the Louisiana terminal via an 85-mile pipeline to a natural gas plant in Jasper County, Texas. It cleared FERC in June.