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The Climate Costs and Economic Benefits of LNG Export

The Climate Costs and Economic Benefits of LNG Export

Full Title: The Climate Costs and Economic Benefits of LNG Export
Author(s): Minhong Xu and Max Sarinsky
Publisher(s): Institute for Policy Integrity - New York University School of Law
Publication Date: January 26, 2024
Full Text: Download Resource
Description (excerpt):

The United States is now the world’s largest liquefied natural gas (LNG) exporter following a surge in gas exports since 2016. At the federal level, approval authority for LNG exports lies with the U.S. Department of Energy (DOE), which has broad permitting authority over most gas exports. Since 2010, DOE has approved dozens of discretionary, long-term export applications. These export approvals are valid for decades, with many extending through 2050. But these approvals have generated controversy due to their climate effects.

This policy brief provides an analysis to support that effort to balance the full range of impacts from LNG export. Using DOE’s own published studies, they compare the climate cost per unit of LNG export to the economic benefit (measured using consumer welfare). They find that climate costs likely exceed economic benefits. While the precise difference depends on several factors—including the share of gas production that merely displaces fossil-fuel production from other sources, the economic value assigned to climate damages, and the adoption of carbon-capture technology—gross climate damages greatly exceed economic benefits under all scenarios evaluated.

These findings provide useful insights as DOE prepares to re-evaluate the LNG export program. In particular, their findings provide a potential basis for DOE to rationally conclude that future export applications do not serve the public interest. At a minimum, their analysis supports DOE’s efforts to more closely scrutinize export applications and provides important data points for the agency’s consideration.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

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