North American liquefied natural gas (LNG) exports are poised for significant growth in the coming years, driven by record production in the United States, according to a forecast by the U.S. Energy Information Administration (EIA). The report states that LNG export capacity in North America is expected to more than double between 2024 and 2028, from 11.4 billion cubic feet per day (Bcf/d) in 2023 to 24.4 Bcf/d in 2028. These projections are contingent on the successful operation of 10 projects currently under construction in Mexico, Canada, and the United States.
The Department of Energy (DOE) recently approved its first LNG export permit to a non-Free Trade Agreement (FTA) nation in seven months, signaling a positive development for the industry. The permit was granted to Houston-based New Fortress Energy (NFE), allowing the company to export 1.4 million tons of LNG per year to non-FTA countries from its Altamira terminal in Mexico. This approval is expected to diversify global LNG supplies and improve energy security for U.S. allies and trading partners, according to the DOE.
It is worth noting that this approval does not indicate a general avalanche of permit approvals for projects that have been on hold since the temporary pause on new non-FTA export applications was imposed earlier this year. The Biden administration implemented the pause to conduct a study on the factors used to evaluate LNG exports, including potential energy cost increases and greenhouse gas emissions. The study is expected to be completed by December, with finalization in early 2025. The outcome of the study and any subsequent rule-making will depend on the political landscape following the upcoming elections.
Despite these regulatory challenges, the global LNG market is projected to experience sustained expansion due to increasing natural gas demand. Analysts forecast that the market will grow from $74.6 billion in 2023 to $103.41 billion by 2028, with a compound annual growth rate of 6.75 percent. This growth is driven by expanding export and import capacities, as well as rising natural gas demand worldwide.
While the approval of NFE’s export permit has been praised by industry groups, climate change organizations have raised concerns about the environmental impact of LNG projects. A report by Oxfam of America estimates that the 14 LNG export projects could emit the same amount of greenhouse gas as 532 coal plants. These concerns highlight the need for a balanced approach to energy production and the transition to renewable sources.
Litigation is also underway, with environmental groups filing lawsuits against the Federal Energy Regulatory Commission (FERC) and specific LNG projects. These lawsuits argue that the projects violate the Natural Gas Act, do not provide a public benefit, and could harm industries such as commercial fishing.
In conclusion, the North American LNG industry is poised for significant growth in the coming years, driven by record production in the United States. Despite regulatory challenges and concerns about environmental impact, the global LNG market is projected to continue expanding due to increasing demand. It is important to strike a balance between meeting energy needs and mitigating the environmental effects of LNG production.
 exports are set to soar in the next few years, driven by record production in the United States. According to a forecast by the U.S. Energy Information Administration (EIA), LNG export capacity in North America is expected to more than double by 2028. However, regulatory challenges and environmental concerns loom over the industry, highlighting the need for a balanced approach to energy production. Learn more about the potential growth and challenges facing the North American LNG market.){kind=link}