Biden administration announced on Friday that it will pause approval of new liquified natural gas (LNG) exports.
“My Administration is announcing today a temporary pause on pending decisions of Liquefied Natural Gas exports–with the exception of unanticipated and immediate national security emergencies. During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment. This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time,” President Joe Biden said in a statement.
The president stated that this is a response to the calls of environmentalists.
“We will heed the calls of young people and frontline communities who are using their voices to demand action from those with the power to act,” he said.
The Biden administration will conduct an assessment during this temporary pause as the previous one—done in 2018—is old, Secretary of Energy Jennifer Granholm told CNBC.
“Since the shale boom and the exports of LNG have begun, we have undertaken a periodic assessment of what the lay of land is. The last assessment was done in 2018. At that time we were only exporting 4 billion cubic feet of natural gas, which is a fraction of what we’re doing now. We’re exporting 14 billion cubic feet, we have another 12 billion cubic feet that are under construction, and a total of 48 billion cubic feet that have been authorized,” she said.
Ms. Granholm dodged the question of why the assessment couldn’t be done without the pause but insisted that current exports would not be affected as it would take years for the projects to be able to produce and export natural gas.
The Biden administration’s move is widely regarded as a gesture to embrace the environmentalists who feel President Biden hasn’t been progressive enough to meet their demands.
Pause to Last for Months
A natural gas project needs to be approved by the Federal Energy Regulatory Commission (FERC) before the Department of Energy (DOE) considers its exports.Thirteen projects—which are currently on the queue between FERC and DOE—with a capacity of twelve billion cubic feet will be affected, Ms. Granholm said.
The pause will last some months, Ms. Granholm said.
The timing of the pause seems to be parallel with the 2024 election cycle.
A high-profile project that could be affected by the pause is Venture Global’s Calcasieu Pass 2 (CP2) pending LNG project in Louisiana.
The DOE said the pause applies to all current and future pending applications until the review is complete. That means the pause could include projects like CP2 if approved by FERC, which only voted down an LNG project once, a move it later reversed.
‘A Win for Russia:’ Industry Group
Companies and countries in Europe are worried about steady supplies of U.S. gas as the region tries to wean itself off pipelined gas from Russia after its 2022 invasion of Ukraine. U.S. allies in Asia also covet LNG as they seek to slow coal consumption.In a vehement refutation to the move, the American Petroleum Institute (API) said this is a win for Russia.
“This is a win for Russia and a loss for American allies, U.S. jobs, and global climate progress. There is no review needed to understand the clear benefits of U.S. LNG for stabilizing global energy markets, supporting thousands of American jobs, and reducing emissions around the world by transitioning countries toward cleaner fuels. This is nothing more than a broken promise to U.S. allies, and it’s time for the administration to stop playing politics with global energy security,” API President and CEO Mike Sommers said in a statement on Friday.
The API and several other industrial groups warned that the pause wouldn’t help President Biden’s climate agenda either.
“Not only would curbing LNG export approvals hamper U.S. energy leadership and jeopardize American jobs, but it would undermine global efforts to reduce greenhouse gas (GHG) emissions. The U.S. leads the world in CO2 emissions reductions largely thanks to coal-to-natural gas fuel switching in the power sector,” the groups wrote in a letter one day before the Biden admin’s announcement.
