The Biden administration is pausing the review process for liquefied natural gas (LNG) export terminals, a move which could have serious repercussions for American energy dominance.
The White House ordered the pause and instructed the Department of Energy (DOE) to assess the climate impacts of proposed export terminals as a factor in determining whether they are in the public interest. While the decision does not outright kill the Calcasieu Pass 2 (CP2) project or other LNG export facilities, it could be the first step towards cancellations and potentially shake up the financing already in place for the massive infrastructure projects.
The U.S. exported more natural gas through the first six months of 2023 than any other country in the world, according to the U.S. Energy Information Administration, and new export terminals would extend that dominance. The announcement had been expected since mid-week, and it is now official.
“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,” Biden said in a statement. “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. While MAGA Republicans willfully deny the urgency of the climate crisis, condemning the American people to a dangerous future, my Administration will not be complacent. We will not cede to special interests.”
White House officials reportedly met with several activists, including a 25-year old TikTok influencer and members of the confrontational group known as Climate Defiance, ahead of the decision. Environmental activist groups pressured Biden to kill the project, especially after the administration allowed ConocoPhillips’ Willow Project in Alaska to go ahead last year. Young voters and the environmentalist activists are shaping up to be key constituencies for Biden in the 2024 presidential election.
Beyond the context of the American LNG industry, the biggest losers of the Biden administration’s decision to pause the export terminal review could end up being U.S. allies in Europe. American LNG exports to Europe have increased significantly since the Ukraine war started, and European firms have invested vast sums of money in expanding LNG import infrastructure that would complement American export facilities like CP2. Numerous pundits have credited American LNG for allowing Europe to wean off Russian supply and provide staunch political support for the Ukrainian cause.
“This is a win for Russia and a loss for American allies, U.S. jobs and global climate progress,” Mike Sommers, the president and CEO of the American Petroleum Institute, said of the decision. “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.”
Other natural gas trade groups slammed the decision before it became official, writing in a Wednesday letter to Energy Secretary Jennifer Granholm that “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 White House did not respond immediately to a request for comment.
Nick Pope on January 26, 2024
