The Department of Energy is pausing approvals of liquefied natural gas exports while it conducts an open-ended analysis of the impacts of the shipments — a move being blasted by fossil fuel groups and applauded by environmentalists who say it is necessary to address climate change.
Only projects that are pending before DOE will be included in the pause, and all currently approved exports will be unaffected, Energy Secretary Jennifer Granholm told reporters on a Thursday night call.
“As our exports increase, we must review export applications using the most comprehensive, up-to-date analysis of the economic, environmental and national security considerations,” Granholm said on the call. “Today, the Department of Energy is initiating an update of the process by which we make these assessments. This action includes a pause on pending applications of U.S. natural gas as LNG.”
The pause, which an administration official said would take “some months,” applies to exports that would go to countries the U.S. does not have a free-trade agreement with. Granholm said the pause would not impact the nation’s “ability to supply our allies in Europe, Asia or recipients of already authorized exports.” She said that “if needed,” DOE could determine exceptions to the policy for national security needs. The U.S. does not have a free-trade agreement with any country in Europe.
In recent months, environmentalists have ratcheted up pressure on DOE to curtail LNG exports, arguing they produce significant methane emissions that warm the planet. Methane is about 80 times more potent a greenhouse gas than carbon dioxide during a two-decade span. Activists plan to protest DOE headquarters in Washington in early February.
U.S. LNG exports have spiked in recent years. In the first half of 2023, they averaged 11.6 billion cubic feet per day, making the U.S. the largest LNG exporter globally. In 2022, the U.S. exported 10.2 Bcf/d, a 16 percent increase over 2021.
Several LNG projects are currently awaiting DOE approval, including one led by Commonwealth LNG proposed for Louisiana’s Cameron Parish. The projects were previously cleared by the Federal Energy Regulatory Commission, which authorizes the siting and construction of LNG import and export facilities. DOE approves export licenses.
Environmentalists have focused much of their ire on a Venture Global project called CP2, which would export 20 million metric tons of gas overseas per year from Louisiana’s Cameron Parish. The $10 billion CP2 project could boost daily U.S. LNG shipments by about 20 percent. Green groups say it’s a symbol of a continuing global reliance on fossil fuels.
But the CP2 project is not yet approved by FERC. For that reason, a senior administration official said Thursday that “there will be no impact on CP2 from this pause.”
FERC is an independent agency, although presidents nominate its commissioners and senators confirm them. Its next open meeting is scheduled for Feb. 15.
A fact sheet from the White House did not address the CP2 project or other export proposals by name. According to DOE, the pause applies to “current and future” pending applications until analysis is complete.
On the call with reporters, a senior administration official said DOE would work “expeditiously” on the updates to its analyses.
“Once they’re updated, they’ll be put out for public comment before they’re finalized,” the official said. “We anticipate this will take some time, some months, to update prior to any public comment period.”
How high are LNG emissions?
LNG companies often refer to a 2018 DOE-commissioned study to bolster their case for exports. The analysis, which DOE sought at the time to “inform its decision on pending and future applications,” identifies LNG as a boon to the U.S. economy.
A separate 2019 study on the climate change impacts of LNG, conducted by DOE’s National Energy Technology Laboratory, found that U.S. LNG exported to Europe and Asia produce less greenhouse gas emissions than coal produced and consumed in those regions. DOE often cites the findings in LNG export approvals.
Environmentalists say the studies are outdated, and both LNG supporters and critics continue to study LNG life cycle emissions.
European demand for U.S. LNG increased dramatically following the Russian invasion of Ukraine in 2022, which caused an economic and political split between Russia and many European countries. But a report from environmental groups Friends of the Earth, Public Citizen and BailoutWatch released this week finds that European customers represent less than a fifth of all U.S. LNG contracts.
“The temporary surge in LNG exports to Europe since the outbreak of war in Ukraine is not translating into long-term demand,” said the report. “Already-operating export terminals position the United States as the world’s top LNG supplier, providing more than enough methane for key allies.”
Environmental groups have also pointed to an October 2023 report from the Paris-based International Energy Agency, which said Europe’s natural gas consumption stayed “broadly flat” between 2017 and 2021 and is forecast to dip eight percent during 2022 to 2026.
On Thursday, 60 members of the European Parliament sent a letter to the Biden administration that echoes calls from U.S. environmental groups.
“We urge the Biden administration to pause the approval of all new LNG export facilities, until it can properly assess the impact of these facilities on the climate, environmental justice, and the public interest,” the letter said, according to a post by Parliament member Marie Toussainton X, known formerly as Twitter.
Some energy experts say the Biden administration’s move to delay consideration of new permits is smart politically.
“It puts off a showdown between some environmental advocates and those concerned about the geopolitical and security implications of denying permits,” Paul Bledsoe, a former Clinton White House climate official, told E&E News. “These issues can be dealt with more clearly after the election.”
‘Deeply disturbing’
Meanwhile, LNG supporters say a pause will cause major disruptions to energy markets. Marty Durbin, president of the U.S. Chamber of Commerce’s Global Energy Institute, said U.S. LNG “plays an essential role in the energy transition” by displacing Russian gas and coal.
“The Administration’s decision to freeze review of new LNG terminals is deeply disturbing and raises significant risks around the globe,” Durbin said in a statement Friday. “Our allies around the world have made it abundantly clear they need more U.S. LNG, and the White House should listen.”
In a post Thursday on X, one of three commissioners leading the Texas Railroad Commission — which regulates the state’s oil and gas industry — also blasted the Biden administration over LNG exports.
Biden’s “obsession with Green New Deal policies not only hurts us at home but emboldens our enemies abroad,” said Christi Craddick, the commission’s Republican chair. Craddick filed for reelection in November 2023.
LNG firms in the U.S. are continuing to strike deals to move projects forward. On Thursday, Glenfarne Energy Transition, which is pursuing several LNG projects, said it has completed the permitting required to obtain a final investment decision for its Texas LNG export project.
While much of the criticism of LNG has focused on climate change, pressure on DOE to curtail LNG exports has also come from advocates like Paul Cicio, president of the Industrial Energy Consumers of America, an industry group representing domestic manufacturers. The organization says it represents companies with 1.8 million employees but does not publicly share its membership list.
IECA says “U.S. natural gas and electricity prices are impacted by LNG exports when U.S. inventories are low, which is what happened in the winter of 2021-2022 and spot prices of natural gas increased by 300 percent.”
In a letter Thursday, Cicio urged Granholm to pause approvals of new LNG projects.
“As LNG exports increase, so do reliability and price risks for the natural gas and electricity markets,” he said. “We urge you to put U.S. consumers first, not last, like it is today and put in place consumer safeguards.”
