As consumers across the globe face rising gas and power prices, curtailing US LNG exports has been raised as an option to protect US consumers. At a time of extreme stress in gas markets, any mandated disruption to US LNG supply would have a highly destabilizing effect.

Key implications include:

• Disruption to exports would undermine confidence in the United States as a reliable supplier and cause tensions with international allies and companies who have underwritten development of the LNG business over the last decade through long-term binding partnerships and contracts.
• Longer-term damage to the reputation of natural gas and LNG would prolong the reliance on coal in many Asian markets, with negative implications for carbon emissions.
• A loss of confidence in the United States as a reliable source of LNG would hamper development of the next wave of projects, harming domestic investment confidence and thereby risking under-investment and higher prices for US consumers and damaging industrial competitiveness in the medium and longer term.
• At a time of rising tension over Ukraine, a US ban would be a gain for Russia in Europe, resulting in increased reliance on Russian gas, and enabling Russia to say that the United States, not Russia, is the unreliable supplier.
• A ban would be a major hit to the US balance of trade and further stress imbalance in trade with other countries. From January through September 2021, the United States exported LNG worth approximately $17.5 billion.

Figure 1: Dependence on US LNG by select region, 2021

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Posted 10 December 2021 by Matthew Palmer, Senior Director, Global Gas, S&P Global Commodity Insights and

Michael Stoppard, Global Gas Strategy Lead and Special Advisor, S&P Global Commodity Insights

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.