LNG exports are projected to become the second-largest net export industry in the United States within 5 years, according to a new study by S&P Global Energy, supporting 550,000 jobs annually and contributing $1.4 trillion to US GDP through 2040, while having a negligible impact on domestic gas prices.

The new study projects that, under current conditions, US feedgas demand for LNG exports is expected to double to 36 bcfd within 5 years, 25% higher than previous base case projections. The US, already the world’s leading LNG supplier, is expected to surpass a one-third share of the global market making LNG exports the second largest net export industry in the country during this time, second only to US civilian aircraft and parts.

The study, Price and Economic Impacts of an Accelerating Export Industry,  updates the findings of a December 2024 study to account for a surge in LNG investment that has occurred since the lifting of the US LNG pause in January 2025, with seven new projects taking final investment decision and several more expected in the next 6-12 months.

Total investment across the LNG supply chain is estimated to exceed $1 trillion by 2040. In addition to the increased jobs and GDP gains, LNG export activity is projected to generate over $2.9 trillion in total US business revenues, $206 billion in federal and state taxes, and nearly $630 billion in labor income. Of these impacts, 42% of jobs and 33% of GDP contributions are expected to occur in non-gas-producing areas.

Domestic price effects

Domestic price effects are limited, with end user gas costs projected to rise by an average of 1.6% per household from 2026 to 2031, according to the study. US natural gas prices are expected to remain among the lowest globally for both residential and industrial users.

"More than 45 years of identified commercial gas resource in the US at today’s production levels and the world’s most interconnected pipeline network are what enable both exports and low domestic prices," said Eric Eyberg, vice-president, gas and LNG, S&P Global Energy. "Since 2010, domestic prices have trended downward even as demand for US gas has grown 70%. The recent Iran conflict has proven the US domestic gas market resilient to external shocks relative to global gas and other commodities. US Henry Hub gas prices declined during the conflict."

Additionally, flexible US LNG has turned export capacity into a domestic gas price shock absorber, the study says. During Winter Storm Fern, up to 9 bcfd of feedgas was redirected for domestic consumption, providing critical supply for residential markets amid surging winter heating demand.

However, infrastructure constraints remain a key factor in higher-priced regional markets and price volatility.

The US possesses the world's most interconnected natural gas infrastructure network, featuring a pipeline system spanning over 300,000 miles. The annual volume of natural gas transported through the system exceeds the combined consumption of 130 countries. Nevertheless, key bottlenecks remain.

This study examines the potential impact of expanding pipeline capacity in the Northeastern United States, a region where winter heating needs and rising winter electricity loads drive extreme seasonal demand fluctuations and sharp price volatility. New capacity additions could reduce peak winter month gas prices by more than 20% in key New England and New York markets during the 2028-2031 period, the study finds.

Global gas prices

The study indicates that an extended pause—defined as a scenario where the new investment since 2025 in US export capacity was not realized—would cause global LNG markets to tighten significantly by 2031, driving up natural gas prices in Europe and Asia by 50%. This would effectively shift up to $76 billion annually to non-US energy suppliers, who would step in to fill the supply gap—largely by relying on other fossil fuels, including coal, to meet demand.

The study shows that, as the US is currently the number one supplier of LNG to Europe, the largest beneficiary of any curtailment of US flows would be Russia. Due to current sanctions, Russia has up to 14 bcfd of underutilized gas pipeline and LNG export infrastructure—connected with and proximate to Europe—that could quickly increase flows to meet regional needs.