American LNG is Critical for Global Prosperity 

More American LNG export terminals will soon come online. They can’t arrive a moment too soon for the global economy, and for the people of nations dependent on natural gas for their very survival. 

The EIA forecasts that two new U.S. LNG export terminals will come online in 2024: Golden Pass in Texas, and Plaquemines in Louisiana. Between them, these facilities could add a total of 5.9 billion cubic feet per day of LNG export capacity in 2024. 

This increase in export supply is a critical need for countries in Europe and Asia where LNG prices are once again surging significantly above the historical average. The United States is largely insulated against such price spikes – even in 2022, when prices increased to almost $10/MMBtu at the Henry Hub in Louisiana, they remained a tenth of the European high point of $100/MMBtu. Asian LNG prices, while extremely elevated, stayed slightly lower than European prices for a reason. Many Asian countries, no matter how desperately they depended on LNG imports for everything from fertilizer to electricity, simply could not afford to compete in this market and were forced to do without, at the cost of immense human suffering. 

We are once again seeing global LNG prices spike significantly, with both European and Asian LNG prices approaching the $18/MMBtu mark. (For comparison, Henry Hub prices have remained between $3 and $3.50/MMBtu). At a time when many economies, particularly in the developing world, remain deeply anemic, these cost increases risk forcing many of the world’s most in need to do without once again. 

What will the devastating consequences look like? In Sri Lanka, which was forced to do without natural gas-based fertilizers, the consequences were a 50 percent decline in agricultural output within a year which caused a cyclical effect where economic crisis led to further economic crisis and then greater agricultural decline. Sri Lanka has not yet recovered from this effective collapse, although it has begun taking tentative steps in a positive direction. Many countries throughout the region, including Pakistan, were unable to secure any LNG cargos for months, leading to regular blackouts, economic damage, and increased use of coal to compensate. 

Preventing a recurrence of last year’s events is critical for the wellbeing of the world’s poorest. American LNG has already saved Europe from an energy crisis caused by Vladimir Putin’s invasion of Ukraine. As more LNG export terminals come online in 2024 and beyond, the world will be able to count on a steadier supply of lower-carbon energy, minimizing suffering while helping the developing world transition to a cleaner energy future.