On Friday, the White House announced they would implement a temporary pause on pending decisions on exports of Liquefied Natural Gas (LNG) to non-FTA countries until the Department of Energy could update the underlying analyses for authorizations.
Projects involving billions of dollars will be disrupted; critics contend that President Biden’s actions will hurt Europe’s capacity to power its economy without relying on Russian gas.
“The pause could have implications for more than a dozen proposals now awaiting review at the Energy Department, including ventures planned in Louisiana by Commonwealth LNG and Energy Transfer LP,” Bloomberg reported.
The White House used the opportunity in its announcement to attack Republicans, declaring. “As Republicans in Congress continue to deny the very existence of climate change while attempting to strip their constituents of the economic, environmental and health benefits of the President’s historic climate investments, the Biden-Harris Administration will continue to lead the way in ambitious climate action while ensuring the American economy remains the envy of the world.”
Opponents of Biden’s action have pointed out that the current hostilities in the Middle East could threaten traffic through the Strait of Hormuz, where roughly one-quarter of the global natural gas supplies flow. They argue that killing projects that export LNG could have a deleterious effect.
“The administration’s decision to freeze review of new LNG terminals is deeply disturbing and raises significant risks around the globe,” Marty Durbin, president of the US Chamber of Commerce’s Global Energy Institute, said. “It betrays our allies at a time of geopolitical instability and could slow the energy transition.”
“I think they’re really making a miscalculation here. This isn’t just bad policy, it’s bad politics,” Neil Chatterjee, the former chairman of the Federal Energy Regulatory Commission, stated. “We made a commitment to our European allies, to Germany, that we would be there and help them. You really should not be playing politics with energy security.”
“What’s really frustrating from the environmental perspective is that U.S. LNG actually displaces more intense fossil sources of fuel overseas,” he continued. “We have a much cleaner process than the Russians do. So, not only are we providing geopolitical assets to our allies, but U.S. LNG displacing dirtier sources of fuels actually lowers global carbon emissions. And the activists seem to be just kind of brushing over that.”
In late January, a number of oil and gas advocates wrote a letter to Energy Secretary Jennifer Granholm in which they argued against the proposed change in the permitting process for U.S. LNG exports. They wrote:
While our European allies have made significant strides in reducing their reliance on Russian natural gas thanks to American energy producers, Europe faces a considerable supply gap over the long-term that should be met by American energy, not hostile nations. Moving forward with a pause on U.S. LNG export approvals would only bolster Russian influence and undercut President Biden’s own commitment to supply our allies with reliable energy, undermining American credibility and threatening American jobs. An analysis of the President’s pledge to Europe found that the benefits to the United States could include $63 billion in capital expenditures, a GDP boost of $46 billion, and 71,500 jobs supported annually from 2025-2030.