Fossil Fuel Speculators Benefit Most From Pending LNG Terminals, Sticking U.S. Consumers with Higher Bills, Analysis Shows

Expanding liquefied methane (LNG) export infrastructure would primarily benefit Big Oil and speculators while harming US utility customers and causing a massive surge in climate pollution, according to a new report released today from Friends of the Earth, Public Citizen, and BailoutWatch.

The report comes as the New York Times reports the White House is likely to impose a pause on a massive LNG export project in Louisiana known as CP2, a move that may impact other proposed terminals as well.

The report, Methane Madness, examines eight proposed LNG projects being considered for approval by the Biden administration. These unbuilt LNG export projects would expand LNG export capacity into the Asia Pacific region, opening a massive market for Big Oil, and expanding commodity speculation.

“Big Oil’s talking points about European energy security are cynical and inaccurate,” said Lukas Ross, Climate and Energy Deputy Director at Friends of the Earth. “It is past time for the Department of Energy to overhaul its broken, rubber stamp LNG process.”

The data shows that long-term LNG supply contracts are least likely to be signed with European buyers. If the Biden Administration greenlights these projects and they are brought online, over half of the LNG will be locked into contracts with Big Oil companies and commodity traders–loyal only to their own bottom lines.

“Record LNG exports drive up home heating prices for Americans, and line the pockets of fossil fuel CEOs, and these new planet-wrecking projects are not in the interest of the public ,” said Alan Zibel, an energy researcher with Public Citizen. “No amount of misleading energy industry lobbying can undo the simple reality that LNG exports force American consumers to pay more in the long run while U.S.-produced gas winds up in Beijing and Berlin. The expansion of U.S. LNG export capacity simply empowers Big Oil giants and commodity traders’ ability to earn eye-popping profits.”

Key Findings:

• Eight proposed LNG export projects regulated by the US government are locking-in long term contracts with purchasers – a key ingredient needed to attract investors and begin construction. But none of the eight projects have all the permits from the Biden Administration needed to proceed.
• If built, the eight pending projects will produce the annual equivalent of 113 coal plants in planet-warming emissions. President Biden could defuse these carbon bombs by pausing new Department of Energy approvals while existing regulations are overhauled.
• More than half of the volume from these pending facilities has been secured by commodity trading firms and Big Oil’s speculative trading arms. That means the LNG from these facilities, if they are built, will be sold wherever these so-called “portfolio players” can turn the biggest profit — undercutting industry claims that the expansion is needed for European energy security. Four of the five largest purchasers by volume from pending facilities are speculators.
• The temporary surge in LNG exports to Europe since the outbreak of war in Ukraine is not translating into long-term demand. Contracts with European customers represent the smallest share (18%) from pending LNG facilities. Contracts with Asia Pacific customers account for 30% of total volume, with the remaining 52% going to commodity firms and other portfolio buyers.