Biden Freezes Approvals of New Licenses for LNG Exporters
[Stay on top of transportation news: Get TTNews in your inbox.]
The Biden administration on Jan. 26 halted the approval of new licenses to export U.S. liquefied natural gas while it scrutinizes how the shipments affect climate change, the economy and national security — a moratorium likely to disrupt plans for billions of dollars in projects.
The Energy Department study will build on an existing analysis that underpins the agency’s review of proposals to send more natural gas to European, Asian and other countries that are not U.S. free-trade partners. New exports are vetted on a case-by-case basis to see whether they are in the public interest — a threshold established by federal law — but government assumptions used in those reviews haven’t been updated since 2018.
“We will take a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment,” President Joe Biden said in a statement. “This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.”
The move strikes at the heart of the debate over LNG’s role in the future of energy. While advocates contend it’s crucial for getting developing nations to stop using coal and enabling Europe to power its economy without Russian gas, environmentalists warn that building the enormous infrastructure required to ship LNG ensures it will be burned for generations to come.
The administration’s pause comes as environmentalists have seized on projects, including Venture Global LNG’s CP2 export terminal planned for the Gulf Coast, as a litmus test of the president’s climate change commitment.
The permitting halt drew swift condemnation from oil industry leaders and their supporters on Capitol Hill. Sen. Joe Manchin (D-W.Va.), the moderate who leads the Energy and Natural Resources Committee, vowed to hold hearings investigating the decision.
“If this pause is just another political ploy to pander to keep-it-in-the-ground climate activists at the expense of American workers, businesses and our allies in need, I will do everything in my power to end this pause immediately,” Manchin said.
Environmental activists were celebrating Jan. 26 and canceled a planned Feb. 6-8 sit-in at the Energy Department to demand a halt to new LNG approvals.
Ben Gardiner, a cybersecurity expert at the National Motor Freight Traffic Association, shares practical, effective strategies to shield your business. He offers insights into operating systems and a comprehensive guide to cyber resilience. Tune in above or by going to RoadSigns.ttnews.com.
“We have decided to call off the sit-in, as the administration has granted our request,” said Roishetta Ozane, a Louisiana-based activist helping organize the protest. The pause “paves the way for potential rejections and slows down the projects, making it harder for them to secure financing.”
“When we fight, we win,” she added.
The review, which won’t affect previously granted authorizations or immediately shake the U.S. status as the world’s top LNG exporter, will be conducted by the Energy Department’s national labs. After a report is published and made available for comment, it will be finalized and incorporated into the agency’s public interest determinations. The entire process is likely to stretch well past the Nov. 5 presidential election.
Senior administration officials who briefed reporters on the plan would not put a firm timeline on the process, saying only that it would be done expeditiously and take several months.
The pause is subject to exceptions for “unanticipated and immediate national security emergencies,” according to a White House fact sheet.
The Energy Department promised to “use the most complete, updated and robust analysis possible” on market, economic, national security and environmental considerations. That includes “current authorized exports compared to domestic supply” and related greenhouse gas emissions, the agency said in a release.
“A lot has happened in the past decade since this program was created, and we need to have an even greater understanding of the market need, the long-term supply and demand of energy resources, and the environmental factors,” Energy Secretary Jennifer Granholm said.
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.
Environmentalists, such as Bill McKibben, who successfully led the campaign to block the Keystone XL oil pipeline roughly a decade ago, have pressed Biden to shift course on LNG and made clear they are scrutinizing every fossil-fuel project approval under his watch.
The halt in permits represents “the first step in stopping these mega-climate bombs,” said Allie Rosenbluth, U.S. program manager for the environmental group Oil Change International. “Stopping LNG exports is a make-or-break issue for his climate record this election.”
Republicans — including former President Donald Trump — have accused Biden of making a priority of his climate agenda at the expense of domestic jobs and other economic concerns.
“President Biden’s decision to indefinitely pause LNG export permits prioritizes the wishes of radical liberals over U.S. energy security and the security of our allies,” said Representative Cathy McMorris Rodgers (R-Wash.), who heads the House Energy and Commerce Committee. “Everyday Americans want our energy unleashed to strengthen the economy, safeguard jobs and keep us secure.”
White House climate adviser Ali Zaidi said the government’s existing analysis was outdated and didn’t reflect evolving information about how much methane — the prime ingredient in natural gas — could warm the atmosphere. Earlier studies were completed in 2012, 2015 and 2018.
Natural gas burns more cleanly than coal — and oil industry allies argue that’s one reason to bolster exports, not halt them. But environmentalists say methane leaks from wells, pipelines and processing undermine those green credentials and that expanded LNG exports can crowd out investments in emission-free alternatives.
LNG advocates excoriated the administration’s decision, saying it would chill development and undercuts U.S. promises to help Europe wean off Russian gas. U.S. flows of LNG to Europe already surpassed the 50 billion cubic meters of gas annually the bloc sought after Russia’s invasion of Ukraine.
Marty Durbin, president of the U.S. Chamber of Commerce’s Global Energy Institute, called the move “deeply disturbing” and a betrayal of allies. Mike Sommers, president of the American Petroleum Institute, said the administration was “playing politics with global energy security.”
No review is “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,” Sommers said.
Already, 10 North American projects have won the Energy Department’s blessing to export U.S. LNG, but they remain in various stages of development. The U.S. has seven other LNG projects operating, and an additional 12 billion cubic feet a day of export capacity still could be constructed just under existing approvals.
Four projects will be hardest hit because they have gone through initial permitting and a separate required review by the Federal Energy Regulatory Commission yet are effectively blocked without a final export license from the Energy Department.
Want more news? Listen to today's daily briefing below or go here for more info:
