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As the Trump administration promotes U.S. natural gas exports, federal analysts warn that shipping massive volumes abroad could raise costs for consumers at home.
The fracking revolution unleashed abundant natural gas in the early 2010s, lowering costs for heating and enabling gas-fired power production to unseat coal as the top electricity source in the United States.
Now, though, homes and power plants compete with a new and growing source of gas consumption: liquefied natural gas (LNG) terminals, gargantuan facilities that compress and ship gas to buyers overseas. Eight terminals currently export gas from U.S. shores, sucking up more than all 74 million households on the domestic gas network do. Counting those terminals and pipelines that carry the fossil fuel to Canada and Mexico, the U.S. exports more than 20% of its gas production.
LNG facilities generate immense revenue for the companies that build and supply them, but they come with considerable environmental and climate impacts. The export infrastructure justifies even more fossil-fuel extraction at a time of record U.S. production, and the energy-intensive process required to liquefy, ship, and regasify the fuel releases far more carbon than simply burning gas. Depending on how much of the gas leaks along the way, the fuel can be as bad as coal in terms of greenhouse gas emissions.
After a few years of just continuing with the status quo on LNG policy — that is, expand, expand, expand — the Biden administration in January 2024 paused approval of new terminals so that it could rethink how the U.S. evaluates their impacts.
President Donald Trump undid that pause right after taking office last year, as part of a wide-ranging assault on federal climate policies. Now, as the U.S. finds itself in the grip of an affordability crisis, it’s not LNG’s climate implications that have taken center stage but its threat of driving up domestic energy prices when utility rates are already reaching record highs.
Last year was clearly an up year for natural gas prices, which jumped by 56% from a record low in 2024, landing at an annual average of $3.52 per million British thermal units at the Henry Hub, which sets the benchmark gas price. The Department of Energy’s Energy Information Administration expects gas prices to stay nearly flat this year but to soar to about $4.60 in 2027. The reason: “because growth in demand — led by expanding liquefied natural gas exports and more natural gas consumption in the electric power sector — will outpace production growth.”
Trump vehemently supports LNG expansion and has pressured foreign leaders to buy more U.S. gas. But even without new approvals, federal regulators from previous administrations have already confirmed enough LNG expansion to double export capacity by 2029. If that trend elevates gas prices, for the reasons the EIA described, it could indeed end up saddling consumers with even higher energy costs.
Over the past year, gas power prices rose enough that coal staged a limited comeback in power markets. This pushed total U.S. carbon emissions up for the year and contributed to electricity bills rising faster than inflation.
“We have exited the era of low natural gas prices and have entered the era of higher gas prices,” said Tyson Slocum, director of the energy program at consumer advocacy group Public Citizen. “The only outcome here is a far more expensive domestic energy bill for Americans.”
Gas advocates, however, reject the view that significantly higher prices are inevitable and argue that LNG exports have grown considerably without a correlated rise in price.
Since 2016, LNG exports have ascended to 15 billion cubic feet per day without a steady year-over-year increase in domestic gas costs. Henry Hub prices rose in 2021 as the economy revived from its Covid-19 torpor and Winter Storm Uri shocked the Texas market. Prices spiked in 2022 after Russia’s invasion of Ukraine and Europe’s subsequent scramble for non-Russian gas. Then U.S. prices fell below $3.
If gas companies boost production in anticipation of next year’s rising demand, the price escalation predicted by the EIA may not materialize, said Richard Meyer, vice president of energy markets, analysis, and standards for the American Gas Association, which represents gas utilities.
“High prices are never a foregone conclusion — it’s all about the market balance,” Meyer said. “The industry is actually being quite responsive to the price signals.”
As a case in point, he noted that the EIA’s short-term outlook throughout 2025 predicted that gas prices would rise in 2026. Now, 2026 is here, and EIA predicts a 2% annual decrease. If the same dynamic unfolds this year, then the expected price hike in 2027 could vanish, too, as producers drill more to meet demand.
Indeed, when companies are spending $10 billion to $15 billion to build an LNG terminal, they typically secure dedicated gas and pipeline capacity, said Jacques Rousseau, managing director for global oil and gas at the independent data firm ClearView Energy Partners.
“They have all the pieces of the puzzle lined up,” Rousseau said. “LNG companies primarily source gas from new pipeline capacity, since it needs to connect directly with their liquefaction facilities.”
Slocum of Public Citizen, for his part, acknowledges that past LNG expansion was met with more domestic production, but that “production will be challenged to keep up” with the impending demand growth.
After all, it’s not hard to imagine a late-2020s scenario in which AI computing prompts a surge in gas power production just as LNG shipments balloon. New gas exploration could be constrained temporarily — if, say, investment funds dry up or pipeline projects get delayed. Wall Street has already been pushing gas companies to focus on “capital discipline and dividends,” putting a damper on investment in new production, Rousseau noted. Should some constellation of those forces align, a gap could open up between gas supply and demand, sparking the kind of price hikes the EIA is warning about.
Electric utilities can protect their customers from soaring gas prices by diversifying to more wind, solar, and battery power. Slocum, meanwhile, wants the federal government to protect people from higher energy bills by more assertively regulating gas exports.
Per the Natural Gas Act of 1938, companies can build LNG terminals only if the DOE confirms that doing so is in the “public interest.” And while the government has exercised its regulatory power before a terminal gets built — after which the terminal can ship its approved capacity for 25 years — Slocum says that the DOE can and should also put guardrails on export volumes to respond to evolving circumstances.
“There needs to be actual regulation, where the Department of Energy says it’s a conditional approval subject to revision if Henry Hub or other key benchmarks exceed a certain price,” Slocum said. The regulation could blunt the impact of a future international crisis that pulls gas supply away from the U.S. and spikes prices for domestic consumers.
The idea has some populist appeal. But then again, Slocum noted, Republicans in Congress have been proposing even less regulation — in fact, they want to eliminate the public-interest determination altogether.
Some members of the oil and gas industry have a less-caveated stance on the whole question. In the Dallas Federal Reserve Bank’s December pulse check on the industry, one executive from an exploration and production firm expressed hopes that the Fed would cut interest rates, thereby boosting the economy.
Then, the respondent commented approvingly, “new pipeline projects will improve takeaway from West Texas, and new LNG plants will help to drive natural gas prices upward.”
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