Natural Gas Is a Climate Scam — and Consumers Are Paying for It

Despite the fracking boom that made the United States the world’s top fossil fuel producer, the price households pay for natural gas skyrocketed by 52 percent between 2016 and 2023. The increase in energy bills was fueled in part by a surge in liquified natural gas (LNG) exports to foreign markets that is enriching the domestic fossil fuel industry, according to a new report released by the watchdog group Public Citizen this week.

Domestic natural gas production increased by 45 percent between 2016 and 2023, but the price manufacturers and other businesses paid for it rose by 31 precent over the same time frame. In June 2022, natural gas prices plunged by 30 percent after a fiery accident and massive explosion shut down an LNG export terminal in Freeport, Texas, underscoring the link between exports and domestic prices.

While global natural gas prices have cooled since the Russian invasion of Ukraine shocked the market in 2022, the cost of natural gas used by utilities to produce electricity is still 17 percent above 2016 levels, according to the report. U.S. households and businesses paid a total of $106 billion more for electricity in 2023 than in 2016. That increase has hit low-income families especially hard, with an estimated one in six households behind on energy bills as of January 2024.

The report, based on data from the U.S. Energy Information Administration, shows how the cost of natural gas shapes the economy by impacting the price of everything from fertilizer to the cost of electricity, for example, which in turn makes food production more expensive and lifts prices at the grocery store. The price of fertilizer is closely tied to the price of natural gas — the petrochemical industry depends on fossil fuels — and the cost to North American farmers ballooned by 400 percent between 2016 and 2023 due to increased exports and a volatile global market.

Even consumers in states where the fossil fuel industry is entrenched are paying more for energy, despite living in the shadow of the pollution that comes with extracting, transporting, refining and burning natural gas.

Even consumers in states where the fossil fuel industry is entrenched are paying more for energy, despite living in the shadow of the pollution that comes with extracting, transporting, refining and burning natural gas. Residents of Texas and Pennsylvania, the top two gas-producing states, saw their natural gas bills increase by 50 and 51 percent between 2016 and 2023, respectively. In Ohio, where fracking waste disposal threatens drinking water, residential households pay an average of $148 for natural gas each month, making Ohio second only to Alaska for the nation’s highest gas bills.

This is not what we were promised. As the fracking boom swept across the nation and made the U.S. the world’s top producer of fossil fuels, the industry spent years assuring the public that the explosion in “natural” gas production was a win-win. By unlocking vast shale formations, fracking would allow the nation to gain energy independence and provide cheap energy, all while replacing coal with a “bridge fuel” that burns cleaner and produces fewer climate-warming emissions.

However, the “bridge fuel” concept turned out to be a ruse, and just one of many, according to a multi-year congressional investigation released this week. Even top executives at BP knew back in 2017 that fossil fuel infrastructure leaks so much methane directly into the atmosphere that gas is no cleaner than coal over the course of its lifecycle. A recent study found that pollution leaked from oil and gas wells, pipelines and compressors causes $9.3 billion per year in damage linked to climate disruption, and that’s before the fossil fuels are burned for energy.

Of course, it was decades ago when scientists at ExxonMobil determined that their fossil fuel consumption was driving climate change but said nothing. Experts told the Senate budget committee on Wednesday that the industry shifted over the years from explicit climate denial to a more sophisticated strategy of “deception, disinformation and doublespeak” that wrongly paints “natural” gas as cleaner energy.

“Time and again, the biggest oil and gas corporations say one thing for the purposes of public consumption but do something completely different to protect their profits,” said Rep. Jamie Raskin, the ranking Democrat on the House oversight committee, during a hearing on Wednesday. “Company officials will admit the terrifying reality of their business model behind closed doors but say something entirely different, false, and soothing to the public.”

Republicans constantly complain that climate initiatives are raising prices for consumers, but it’s the industry’s rush to expand LNG export infrastructure that keeps prices high — and profits flowing.

With the White House controlled by Democrats, the Environmental Protection Agency finalized new regulations in December that require oil and gas companies to update infrastructure and reduce methane pollution. Methane is essentially unrefined natural gas.

The U.S. produces more natural gas than any other country, but booming exports keep prices high for domestic industries and consumers, according Tyson Slocum, director of Public Citizen’s Energy Program. Republicans constantly complain that climate initiatives are raising prices for consumers, but it’s the industry’s rush to expand LNG export infrastructure that keeps prices high — and profits flowing.

“This is the whole intention of the push for LNG exports; it’s to make [gas] more expensive, because when you make it more expensive, you get bigger profits,” Slocum said in an interview. “There’s no hometown discount. These guys do not care … they don’t care about supplying gas to local communities.”

After coming under pressure from grassroots climate activists and local fishers on the Gulf Coast, where massive LNG terminals load huge tanker ships with liquified gas for export, the Biden administration announced in January a “pause” on permits for newLNG facilities while regulators reexamine whether exports are in the public interest. Well over a dozen export terminals are already causing air pollution, and at least 17 more are awaiting federal permits. Sixteen GOP-led states filed a federal lawsuit in response, arguing that a pause of permits for future export terminals would harm the economy in states such as Louisiana and Texas.

“This whole concept of ‘drill baby, drill’ for lower prices is a complete fabrication,” Slocum said. “The whole goal of pushing exports is making gobs of money for gas producers.”