The liquefied natural gas export industry in the United States could be riding a wave of growth into choppy waters.
A big LNG plant is about to open in Texas, another is set to start a new production line in the state and one of the largest export facilities in North America is set to deliver a full year of production outside New Orleans.
On top of that, companies approved plans for a record-breaking six more LNG projects in 2025, indicating the growth isn’t slowing down anytime soon.
The domestic surge — along with new facilities in other countries such as Canada and Qatar — is raising concerns of a global oversupply of natural gas that could drive down prices abroad and create financial headwinds for the U.S. LNG industry.
And some analysts warn that LNG exports are driving up utility bills for U.S. households — an issue that could that become a political liability. Federal officials say LNG drove a sharp increase in the benchmark price of natural gas in 2025, but projections are that the price won’t surge again until after November’s midterm elections.
The question for the industry is what happens to domestic prices as exports divert nearly one-fifth of U.S. gas production overseas and whether global demand can absorb all of that supply.
“That’s where the rubber meets the road,” said Ira Joseph, an analyst who tracks gas and power markets at Columbia University’s Center on Global Energy Policy. “How is the market going to absorb such a large amount of LNG in such a short period of time?”
The answer depends on a dizzying array of possibilities driven by how markets react to any oversupply, he said. Will U.S. gas producers cut back, or will low prices motivate more countries to use gas, driving up demand and prices. Both are likely, and the result will be determined by timing.
“There’s this dance between supply and demand that happens over time,” said Dan Byers, vice president for policy at the U.S. Chamber of Commerce’s Global Energy Institute.
While the expected glut will probably cause temporary turbulence for LNG exporters, Kenneth Medlock, an energy economist at Rice University’s Baker Institute for Public Policy, said the industry will continue to grow in the long term.
“In the industrial sector, the demand for natural gas is going to keep rising,” Medlock said. “A lot of those places where it’s rising are in developing economies where they don’t have a lot of gas resources, so they’re going to need LNG.”
Medlock said the industry also hit a soft spot in 2017 and 2018, when customers were wary of signing long-term contracts. But the end of the Covid-19 pandemic and Europe’s shift away from Russian gas after the 2022 invasion of Ukraine drove a surge in demand and made LNG a significant part of the U.S. economy.
The Center for LNG, the industry’s main trade group, did not respond to a request for comment. Representatives of Golden Pass, Cheniere and Venture Global — which are all major LNG companies — also didn’t provide comments.
Price projections
Federal energy forecasters have been saying for some time that LNG exports are putting upward pressure on utility prices.
But 2026 could be a lull, as the U.S. Energy Information Administration forecasts that the average U.S. benchmark price of gas will stay steady or drop slightly this year. On Friday, U.S. gas futures were trading for about $3.50 per million British thermal units.
Last year, LNG and weather drove a 50 percent rise in the average benchmark natural price, according to EIA, as political concerns about affordability and power prices also surged. Still, the 2025 average price, $3.52 per MM Btu, was still far below the average in 2022, $6.45 per MM Btu, when Russia’s invasion of Ukraine caused oil and gas prices to skyrocket.
In 2027, EIA forecasts that LNG exports and data centers will again outpace production and push the average price of gas above $4.50 per MM Btu, an increase over 2025 of more than 30 percent.
That would be another punch in the wallet for American ratepayers. According to the American Gas Association, the cost of natural gas made up about 41 percent of the average household gas bill as of 2024.
For years, the U.S. natural gas industry export industry has been a story of unbridled growth. One new giant terminal after another was built along the Gulf Coast, shrinking billions of cubic feet of natural gas 600-fold every day by supercooling it to minus 260 degrees Fahrenheit to ship it across the globe in giant tankers.
Even former President Joe Biden’s “pause” on approving new federal LNG export authorizations did little if anything to slow the pace.
But the growth narrative had a hiccup in December when Energy Transfer, which had protested Biden’s slowdown, announced it was suspending its plans for a new export terminal near Lake Charles, Louisiana.
“They’re saying there’s enough supply out there if we add to this pool, we’re not really doing ourselves any favors,” Medlock said.
The company said it simply saw focusing on new pipelines, such as its Desert Southwest natural gas pipeline expansion from Texas to Arizona, as more profitable. Columbia’s Joseph said he expects other companies may seek to buy the project. Energy Transfer did not respond to a request for comment.
The Lake Charles project, Joseph said, “is of more value to non-U.S. players at this point, particularly Mideast equity.”
The U.S. LNG export industry took off in the final years of the Obama administration and continued during the Biden administration. But Trump has been a particularly enthusiastic supporter, embracing it as part of his “energy dominance” agenda.
Trump’s executive order on “Unleashing American Energy” last January called for approving LNG terminals “as expeditiously as possible,” though it also said economic and employment factors should be considered.
On the one-year anniversary of Trump’s return to office, the administration touted that it put the country on track to double its LNG exports by the end of the decade.
Asked about the prospect of a glut and higher gas prices for consumers, White House spokesperson Taylor Rogers pointed to increased domestic gas production.
Trump, said Rogers, is “keeping prices low even as demand skyrockets.”
Department of Energy spokesperson Ben Dietderich criticized the Biden administration’s skepticism of the LNG industry and said Trump has “reversed those costly policies.”
“Any Biden-inflicted short-term price rises will subside as industry readjusts to a federal government supportive of unleashing American energy,” Dietderich said.
According to EIA, the average benchmark price for gas in 2024 — when Biden was president — was the lowest on record when adjusted for inflation.
Gas companies have often touted natural gas exports as a way to fight climate change by pushing other countries away from coal-fired power. But environmental groups have focused on their violations of clean air regulations and questioned the value of continuing to depend on fossil fuels for power.
LNG has also had high-profile accidents, such as an explosion last week on a pipeline connecting to a planned an offshore LNG terminal, and a 2022 explosion at the Freeport LNG terminal in Texas. That explosion took nearly one-fifth of U.S. LNG export capacity offline for eight months while the facility was closed.
The gas industry, its critics and regulators have said federal safety regulations for the terminals, enacted in 1980, are outdated.
Watching demand
The United States is the world’s largest exporter of LNG, with the capacity to send 15.4 billion cubic feet of gas abroad every day, followed, as of 2024, by Australia and Qatar.
This year, Qatar Petroleum and Exxon Mobil are expecting to begin operations at their Golden Pass terminal on the Texas coast near the Louisiana state line. New production lines at Cheniere’s Corpus Christi terminal and a full year of Venture Global’s giant terminal in Plaquemines Parish, Louisiana, are set to provide further growth. Cheniere last week applied for a permit to expand its Corpus Christi operations by 3.3 Bcf/d.
By the end of the year, U.S. terminals are expected to have the capacity to export about 19 Bcf/d.
Qatar is adding three new terminals that could boost its capacity by 60 percent. And LNG Canada’s facility in Kitimat, British Columbia, is ramping up to add 1.8 Bcf/d to North American capacity.
The huge increase in supply could lead to a glut as soon as next year that could drive down global LNG prices and create financial headwinds for LNG operations.
“You’ll see the facilities being utilized less than they thought they would be,” Medlock said. “The demand is going to have to catch up again.”
Some consumer advocates see nothing but downside in the growth of the U.S. LNG industry, saying the country is bargaining away the benefit of low-cost gas it gained from the fracking-driven shale gas drilling boom.
Tyson Slocum, director of Public Citizen’s energy program, said U.S. prices will rise even if a global glut drives down prices in other countries.
“An overseas glut of gas, even if it’s prolonged, will result in lower foreign benchmark prices, but U.S. prices will continue to creep up to close the gap,” Slocum said in an email exchange.
Slocum has called on the Trump and Biden administrations to use DOE’s legal authority to limit exports to prevent them from driving up domestic prices.
The oil and gas industry has dismissed the idea that exports drive up prices for U.S. consumers. Trade groups note that the benchmark price for gasoline mostly held steady as the country’s export industry grew from almost nothing in 2015 to world-leading.
“A decade of real-world data shows that U.S. LNG exports have not meaningfully impacted domestic natural gas prices, as production has consistently grown faster than exports,” said Rob Jennings, vice president of Natural Gas Markets for the American Petroleum Institute. “Affordability challenges are driven by factors like weather and infrastructure constraints — not exports — and policies that expand reliable supply and support modern infrastructure are essential to protecting consumers.”
Byers with the Chamber of Commerce called the idea that LNG drives up domestic prices “the Groundhog Day of false narratives,” referring to the 1993 movie in which Bill Murray wakes up on the same day over and over.
The United States has vast supplies of natural gas, much of which is extremely low-cost because some of it is essentially an unwanted byproduct of oil production. But the ability to deliver that to customers is limited by the amount of pipelines and other infrastructure that is in place.
But Medlock said it’s more likely that domestic prices would fall if global prices fall because U.S. terminals won’t export as much, freeing up more gas for the U.S. market.
“Exporting in that circumstance would be an out-of-the-money trade,” Medlock said, like buying high and selling low. “That is what happens when the market is oversupplied.”
Still, Columbia’s Joseph says the upward pressure that LNG puts on natural gas prices for ratepayers is destined to become a political issue.
“Whether it’s from the right or the left,” he said, “the issue is going to come up. Not now, not maybe in March, but it’s going to come up. It’s inevitable.”
