Development of additional US LNG projects currently on hold
or in the pre-Final Investment Decision stage would avoid carbon
emissions by 2040 equivalent to more than twice the annual
emissions from the entire car fleet in Los Angeles County
WASHINGTON, March 6,
2025 /PRNewswire/ -- The continued development of
U.S. liquefied natural gas (LNG) export capacity would result in
significantly lower global greenhouse gas emissions compared to the
alternative energy sources that would be required to meet demand in
their place, a new comprehensive study by S&P Global finds.
The study examined LNG projects that are currently on hold or in
pre-Final Investment Decision stage that would represent a combined
40 million ton per annum (Mtpa) of capacity additions from 2028 to
2040.
This expansion of U.S. LNG exports results in global GHG
emissions being 324 / 780 M tCO2e
(GWP100 / GWP20) lower over the 2028-2040 period—or 65 million tons
per year—than they would be if demand were met by the likely
alternative sources, the study finds.
The size of the net reduction in emissions would be equivalent
to:
- More than twice the annual emissions of all the gasoline cars
in Los Angeles County
- Total 2028-2040 emissions from all vehicles on the road in the
United Kingdom
- A third of the reduction in EU energy-related emissions
(GWP 20) over the past decade
- The CO2 absorbed by 5.4 billion trees over 10
years
The net reduction in emissions is due to the lower GHG intensity
of U.S. LNG compared to the average intensity of the combined
energy sources that would replace it in global markets—85% of which
would be made up by fossil fuels from non-U.S. sources, the
study says.
"The continued expansion of U.S. LNG capacity enhances global
energy security while avoiding higher global greenhouse gas
emissions," said Eric Eyberg, Vice
President, Gas and Power Consulting, S&P Global. "Forgoing this
critical source of supply would see it replaced by sources that
have a greater combined GHG intensity while also negating
substantial economic and geopolitical benefits."
The study, Major New US Industry at a Crossroads: A US LNG
Impact Study – Phase 2 is the second installment of a
major research project that leverages the combined expertise of the
S&P Global Commodity Insights and S&P Global Market
Intelligence divisions to provide a comprehensive and
forward-looking assessment of the projected impacts of U.S. LNG
exports.
Phase 1 of the study found that growth of U.S. LNG export
capacity would support nearly half a million domestic jobs annually
and contribute $1.3 trillion to U.S.
gross domestic product through 2040 while having a negligible
impact on domestic gas prices. Conversely, the Phase 1 study found
that an annual average of 100,000+ jobs and more than $250+ billion
in GDP contributions were at-risk if no new or currently paused
U.S. LNG capacity were to come online.
The new Phase 2 study adds the environmental impact assessment
of the continued development of U.S. LNG capacity, expands the
previous economic analysis to include impacts at the State and
Congressional-district level, and offers an antidote to high energy
prices in the Northeast of the United
States.
State and Congressional-district Level Economic
Impacts:
The economic impacts extend well beyond the seven core
gas-producing states (Texas,
Louisiana, New Mexico, Oklahoma, Pennsylvania, Ohio, West
Virginia) with 37% of the total jobs (180,000+) and 30%
of GDP contributions ($390 billion)
occurring in non-producing areas through 2040. Overall, 90% of
every dollar spent would remain within U.S. supply chain, according
to the analysis.
At the U.S. congressional district level, the economic
contributions would concentrate in districts with either investment
in natural gas exploration and production, investment in
liquefaction activities or businesses within the extended supply
chains serving the LNG export industry, the study finds.
Debottlenecking the U.S. Northeast:
The new study also examines the potential impacts of removing
bottlenecks in infrastructure across the U.S. Northeast region
where—despite the existence of the Marcellus and Utica formations that have sufficient proved
reserves to meet all U.S. demand for 17 years—pipeline constraints
have resulted in gas prices in New
York and Boston that are
15–40% higher than the national annual average, and 145% and 160%
higher in the key winter heating month of January.
The study finds that expanding Northeast exit capacity by 6
billion cubic feet per day would generate substantial price impacts
at the regional and national level driving consumer savings far
exceeding the estimated $14 billion
in capital costs necessary for the pipeline expansions, the study
notes.
Northeast region:
- 20%-30% reduction in gas prices for Northeast markets
- $2.25/MMBtu and $1.23/MMBtu reductions for Boston and New
York, respectively in peak months
National level:
- Lower the Henry Hub gas prices by an additional ~$0.20 per MMBtu
- $76 billion cumulative savings
for consumers by 2040
About the Study:
Major New U.S. Industry at a Crossroads: A U.S. LNG
Impact Study – Phase 2 is available at:
https://www.spglobal.com/en/research-insights/special-reports/major-new-us-industry-at-a-crossroads-us-lng-impact-study-phase-2
This study offers an independent and objective assessment of the
global emissions impact of the U.S. LNG Industry built from a
detailed bottom-up approach, at the asset and market level,
technology by technology. It also includes a more detailed state
and congressional districts level economic impact analysis and a
case study on the benefits of increased pipeline capacity in the
U.S. Northeast gas market. It represents the collaboration of
S&P Global Commodity Insights and the Global Intelligence and
Analytics unit within S&P Global Market Intelligence supported
by the world's largest expert team of more than 1,400 energy
research analysts and consultants continuously monitoring,
modelling and evaluating markets and assets.
The study utilized the best satellite data sources available,
including Sentinel-2, TROPOMI, and GHGsat, to quantify methane
emission rates over large areas and identify event-based point
sources. Where available, it has also leveraged high-quality
overflight data from Insight M. The analysis and metrics developed
during the course of this research represent the independent
analysis and views of S&P Global. The study makes no policy
recommendations. This research was supported by the US Chamber of
Commerce.
S&P Global is exclusively responsible for all of the
analysis, content and conclusions of the study.
Media Contacts:
Jeff Marn +1-202-463-8213,
Jeff.marn@spglobal.com
About S&P Global
S&P Global (NYSE: SPGI) provides essential intelligence. We
enable governments, businesses and individuals with the right data,
expertise and connected technology so that they can make decisions
with conviction. From helping our customers assess new investments
to guiding them through sustainability and energy transition across
supply chains, we unlock new opportunities, solve challenges and
accelerate progress for the world.
We are widely sought after by many of the world's leading
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markets. With every one of our offerings, we help the world's
leading organizations plan for tomorrow, today.
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