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10/10/2025
S&P Global Market Intelligence | Major New US Industry at Crossroads: A US LNG Impact Study — Phase 2
USAEE E-NEWSLETTER | CONFERENCE SPECIAL #2
In addition to a preview of the next month's USAEE/IAEE North American Conference, in this edition of the newsletter we also have the opportunity to share the second part of this report originally published in the S&P Global Market Intelligence blog, "Research & Insights," where the full Phase 2 report can be found. Part 1 can be found in our prior USAEE e-newsletter.
Study Preface and Scope
In the S&P Global December 2024 Phase 1 report, we examined the remarkable rise of the US liquefied natural gas (LNG) industry. In less than a decade, this sector has become a major export industry, contributing more than $400 billion to U.S. GDP and supporting hundreds of thousands of American jobs. This development has not only contributed positively to the US economy and export earnings but has also strengthened the international position of the United States and deepened relations with many other countries.
This Phase 2 companion study expands and complements key aspects of our first phase study:
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- The environmental impact of further development of US LNG – in particular, the potential net impact on global GHG emissions of 40 million tons of incremental LNG export capacity tied to projects that are on hold or in the pre-FID (Final Investment Decision) stage from the Phase 1 Base Case
- A State and Congressional-district level economic impact assessment, analyzing the impact of US LNG across the national economy.
- The potential benefits of infrastructure debottlenecking across the value chain, focusing primarily on the Northeast gas market
On the emissions front, Phase 2’s central finding is that increasing US LNG exports leads to 780 million tonnes of CO2e (GWP20) lower GHG emissions globally between 2028 and 2040 than would be the case if demand were met by the likely alternative sources. The study demonstrates why the bulk of demand – absent US LNG – would largely be met with other hydrocarbons, not renewables. This future saving equates to total road transport emissions in the UK over the same period. The reason for these savings is driven by the lower GHG intensity of US LNG compared to the average intensity of the combined energy sources that would replace that LNG in global markets.
This analysis shows that end-use combustion accounts for a significant 57 to 87% of the lifecycle intensity of coal, oil, gas and LNG. Varying levels of methane emissions in the supply chain prior to end-use lead to significant differences between the sources and pathways of each fuel. This highlights the need for frequent and reliable monitoring of methane emissions and the benefits of transparency in GHG intensity.
From a macroeconomic perspective, the Phase 1 Base Case outlook demonstrated that US LNG exports can contribute an additional $1.3 trillion to US GDP through 2040. This Phase 2 report illustrates that the economic impact extends beyond the seven core producing states, with 37% of jobs and 30% of GDP contributions occurring in non-producing areas.
The third part of the report examines the economic benefits of ending one major and costly distortion in the US energy system. This would be achieved by removing bottlenecks in infrastructure especially across the Northeast region. While the Northeast region has sufficient proved reserves to meet all U.S. demand for 17 years, existing pipeline constraints hinder optimal production. These result in gas prices in New York and Boston that are 15–40% higher than the national annual average, and 145% and 160% higher in the key winter heating month of January – imposing a heavy and unnecessary cost burden on consumers. Expanding egress capacity from the giant Marcellus supply by about 6 billion cubic feet per day could reduce January prices by 20% and 30%, respectively, from 2028 to 2040 (17-27% annualized), resulting in cumulative savings of $76 billion for consumers by 2040.
Key Findings
The regional impact of US LNG export value chain reaches all US states — supply chain integration is extensive, broad and homegrown
- Higher US LNG exports lead to lower overall global emissions by displacing the more GHG intensive fuels that would replace them. Specifically, the incremental emissions from US LNG’s continued development (40 Mtpa of pre-FID or ‘halted projects’ identified in Phase 1 Base Case) are lower than the alternative energy sources displaced by 324 (GWP100) or 780 (GWP20)1 million tonnes CO2e between 2028 and 2040, equivalent to the total road transport emissions in the UK over the same period.
- End use combustion is responsible for 57–87% of GHG intensity for coal, oil, gas and LNG, with supply chain methane emissions the key driver of variation between fuels (e.g., domestic vs. international LNG, domestic versus piped natural gas imports, or different crude oil streams).
- Coal emits roughly 70% more greenhouse gases than the US LNG it would replace across all the alternatives analyzed
US LNG industry growth is expected to double its US economic footprint to 2040.
- US LNG’s unprecedented growth is enabled by an extended cross-state value chain, that reaches beyond the core-producing states – about 90% of every dollar spent remains within United States supply chains
- Of the annual average of 495,000 US jobs supported through 2040, 37% will be in non-producing states. As many jobs will be supported in on-producing states as in Texas
- Over the same period, LNG Exports will contribute $1.3 trillion in GDP, with $383 billion or 30% in non-producing states. On a per capita basis, producing states benefit from a cumulative $13.2K GDP per capita
Unlocking the full potential of Marcellus and Utica shale gas through additional pipeline capacity would lead to lower prices and consumer savings, particularly in the Northeast
- The US Northeast (NE) has vast amounts of low-cost gas reserves in the Marcellus and Utica formations (New York, Pennsylvania, West Virginia, Ohio), sufficient to meet nationwide demand for ~17 years
- Due to pipeline constraints these reserves are being developed at a suboptimal rate, pushing gas prices at Boston, Chicago and New York City Gates up 160% higher than the national gas market in peak months
- Expanding NE pipeline capacity by 6.1 Bcf/d could reduce HH gas prices by $0.20/MMBtu and significantly lower prices across the region. Cumulative nationwide consumer savings could reach $76 billion through 2040
Read the the full Phase 2 report on the S&P Global Market Intelligence blog, "Research & Insights."
