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The Market and Climate Implications of U.S. LNG Exports

The Market and Climate Implications of U.S. LNG Exports

Full Title: The Market and Climate Implications of U.S. LNG Exports
Author(s): James Stock and Matthew Zaragoza-Watkins
Publisher(s): National Bureau of Economic Research
Publication Date: March 1, 2024
Full Text: Download Resource
Description (excerpt):

From 2015 to 2023, the United States transformed from a net importer of natural gas to the world’s largest liquified natural gas (LNG) exporter. The authors find that this surge in LNG exports has reconnected U.S. gas prices to world market prices, after a hiatus of “shut-in” fracked gas. The authors estimate that the domestic gas price effect of this recoupling is comparable to a $30/ton carbon tax. For coal prices, which are coupled to gas through competition in the power sector, this effect is comparable to a $20/ton carbon tax. Using the NREL ReEDS model, they estimate that this recoupling reduces U.S. 2030 power sector CO2 emissions by roughly 145 million metric tons. These domestic estimates contribute to estimating the overall climate impact of LNG exports.

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