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Biden administration to temporarily halt some export approvals for liquified natural gas


Biden administration to temporarily halt some export approvals for liquified natural gas

Jan 26, 2024 | 5:05 am ET
By Jacob Fischler
Biden administration to temporarily halt some export approvals for liquified natural gas
U.S. Secretary of Energy Jennifer Granholm speaks during the daily press briefing at the White House on June 22, 2022 in Washington, D.C. (Photo by Drew Angerer/Getty Images)

The U.S. Energy Department will pause approvals of new exports of liquified natural gas to all countries without a free trade agreement with the United States, Secretary Jennifer Granholm and White House National Climate Advisor Ali Zaidi said on a press call Thursday.

They said the agency is readying a new review framework that could give greater weight to the effects of liquified natural gas on climate change.

U.S. capacity for exporting liquified natural gas, or LNG, a less carbon-intensive alternative to other fossil fuels such as coal, has tripled since 2018 and is projected to double again by 2030 because of new projects already under construction, Granholm said.

The rapid pace of growth in the industry requires an update to how the administration assesses proposed export projects, she said.

“As dynamics change, it’s critical that the Department of Energy remains a responsible actor in our assessments of whether additional liquefied natural gas export authorization requests to non-free-trade- agreement countries are in the public interest,” she said.

Members of the oil and gas industry warned the administration in recent days not to hinder exports of LNG, saying such a move would hurt U.S. geopolitical and climate goals.

Granholm noted Thursday the pause will not affect existing export agreements and would not apply to proposals to export to free-trade partners.

Administration officials were confident the U.S. could continue to supply natural gas to allies in Europe and Asia.

But Granholm said policymakers had to take into account a shifting reality in the industry.

The growth in the LNG market required the department to have an “even greater understanding of the market need, the long-term supply and demand of energy resources and the environmental factors,” she said.

Granholm and Zaidi gave few details during the brief press call of how the department would update its analyses, though Zaidi spoke extensively about President Joe Biden’s commitment to addressing climate change.

An updated analysis process would help gather information lacking in the current model to make decisions based on climate, he said.

“The president was clear that in this administration, as we took action to develop our approach on climate change, that the science would inform how we proceeded,” Zaidi said. “And as the secretary has talked about, the analysis that informs decision-making around the applications for these exports does not benefit from the extensive amount of information we’ve started to gather, I think, as a collective community.”

Industry objects

Anticipating possible changes to the permitting process for LNG exports, 32 groups representing the oil and gas industry wrote to Granholm and other administration officials Wednesday promoting the fuel.

U.S. LNG exports to European countries were “critical to undercutting” Russian President Vladimir Putin’s “meddling in Europe,” the industry members, including the American Petroleum Institute, the U.S. Chamber of Commerce and several state-level industry groups, wrote in the letter.

LNG production also boosts U.S. economic performance, they wrote.

And the fuel helps the administration’s climate goals by replacing alternatives that emit more carbon dioxide, they said.

The groups suggested that a move to curb LNG exports was a political favor to climate activists in an election year.

“Our industry is proud to support our allies and global emissions goals, but the geopolitical and climate benefits of American energy exports cannot be maintained with a regulatory regime that moves at the whims of political pressure,” the letter said. “We urge you to reject calls for DOE to prolong the review period or create new hurdles as it considers approvals for new LNG projects and terminals.”

In a blog post Wednesday, the environmental research and advocacy group Natural Resources Defense Council said the administration should work to reduce all greenhouse-gas-emitting fuels, including natural gas.

The post, written by NRDC senior director for international climate Jake Schmidt, energy analyst Ade Samuel and international energy advocate Shruti Shukla, argued there was little evidence LNG replaced coal power. Instead it competes with renewable energy sources such as wind and solar, they said.

“Instead of leading the world in LNG exports, the United States must curb the deeply harmful expansion of this sector and phase out all support for overseas fossil gas investments,” they wrote. “It’s what is right for the economy, communities, and the climate.”

Officials minimize impact on proposed Louisiana site

The pause most immediately affects four projects that are currently under review at the Department of Energy, a senior administration official said. The official answered reporter questions on the condition he would not be identified by name.

Those four projects include two larger and two smaller projects, the official said, without identifying them.

It did not include Calcasieu Pass 2, a massive export terminal proposed in Cameron Parish, Louisiana, that some speculated the administration would seek to halt. That project’s application was still before the Federal Energy Regulatory Commission, which reviews projects before the Energy Department, he said.

The officials did not offer a firm timeline for completing the new assessment, but said it would likely be months before it was ready for a public comment period.