Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Shaded regions represent maximum and minimum values for each projection year across the AEO2023 Reference case and side cases. LNG=liquefied natural gas.
In our Issues in Focus: Effects of Liquefied Natural Gas Exports on the U.S. Natural Gas Market supplement to our Annual Energy Outlook 2023 (AEO2023), we find that the volumes of liquefied natural gas exports (LNG) do affect average U.S. natural gas prices. However, the resulting range in natural gas prices in our new cases was narrower than the price range in recent history and the AEO2023 side cases despite a wide variety of U.S. LNG export volumes.
In our AEO2023, we explore long-term energy trends in the United States and present an outlook for energy markets through 2050. The Issues in Focus articles based on the AEO provide in-depth discussions on topics of special significance, such as LNG exports. This Issues in Focus presents three additional side cases to the AEO2023 that explore how LNG exports volumes affect domestic natural gas prices. These three cases are the:
- Low LNG Price case, which assumes lower international natural gas prices
- High LNG Price case, which assumes higher international natural gas prices, with limits on how fast export facilities can be developed
- Fast Builds Plus High LNG Price case, which assumes the same higher international natural gas prices as the High LNG Price case but also allows faster development of export facilities than in our other AEO2023 cases
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023) and LNG Capacity Tracker
Note: Existing, under construction, and approved liquefied natural gas (LNG) capacities are baseload capacities. Shaded regions represent maximum and minimum values for each projection year across the AEO2023 Reference case and side cases.
In these Issues in Focus cases, we project that, in 2050, LNG exports will range from 15.3 billion cubic feet per day (Bcf/d) in the Low LNG Price case to 48.2 Bcf/d in the Fast Builds Plus High LNG Price case. For comparison, in 2050, we project LNG exports will be:
- 12.6 Bcf/d in the Low Oil Price, where we assume lower crude oil prices relative to the Reference case
- 27.3 Bcf/d in the Reference case
- 39.9 Bcf/d in the High Oil Price case, where we assume higher crude oil prices relative to the Reference case
We project that increased U.S. natural gas demand from LNG exports increases the natural gas spot price at the Henry Hub. In these three Issues in Focus cases, we project that the Henry Hub price in 2050 ranges from $3.30 per million British thermal units (MMBtu) in the Low LNG Price case to $4.30/MMBtu in the Fast Builds Plus High LNG Price case. For comparison, we project the Henry Hub price in 2050 will be $3.80/MMBtu in the Reference case. The Issues in Focus cases project a narrower range of the spot price than in our AEO2023 Oil and Gas Supply cases, which alter assumptions regarding resource availability and extraction costs. We project the Henry Hub spot price to be as low as $2.80/MMBtu in the High Oil and Gas Supply case and as high as $6.40/MMBtu in the Low Oil and Gas Supply case.
Principal contributor: Stephen York