Biden's LNG export pause leaves Europe in bad place

This decision will affect projects worth billions of dollars. Critics argue that this move by President Biden will undermine Europe's ability to fuel its economy independently of Russian gas.

Biden's LNG export pause leaves Europe in bad place
AP Photo/Alex Brandon
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On Friday, the White House declared a temporary halt on upcoming decisions regarding Liquefied Natural Gas (LNG) exports to countries outside the Free Trade Agreement. This pause will remain until the Department of Energy revises the foundational analyses for approvals.

This decision will affect projects worth billions of dollars. Critics argue that this move by President Biden will undermine Europe's ability to fuel its economy independently of Russian gas.

“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,” Bloomberg reported.

In its announcement, the White House took the chance to criticize Republicans, stating, “As Republicans in Congress continue to deny the very existence of climate change while attempting to strip their constituents of the economic, environmental and health benefits of the President’s historic climate investments, the Biden-Harris Administration will continue to lead the way in ambitious climate action while ensuring the American economy remains the envy of the world.”

Critics of Biden's decision have noted that the ongoing conflicts in the Middle East might jeopardize movements through the Strait of Hormuz, a critical passage for about a quarter of the world's natural gas. They contend that halting LNG export projects could have harmful consequences.

“The administration’s decision to freeze review of new LNG terminals is deeply disturbing and raises significant risks around the globe,” Marty Durbin, president of the US Chamber of Commerce’s Global Energy Institute, said. “It betrays our allies at a time of geopolitical instability and could slow the energy transition.”

“I think they’re really making a miscalculation here. This isn’t just bad policy, it’s bad politics,” Neil Chatterjee, the former chairman of the Federal Energy Regulatory Commission, stated. “We made a commitment to our European allies, to Germany, that we would be there and help them. You really should not be playing politics with energy security.”

“What’s really frustrating from the environmental perspective is that U.S. LNG actually displaces more intense fossil sources of fuel overseas,” he continued. “We have a much cleaner process than the Russians do. So, not only are we providing geopolitical assets to our allies, but U.S. LNG displacing dirtier sources of fuels actually lowers global carbon emissions. And the activists seem to be just kind of brushing over that.”

At the end of January, several proponents of oil and gas sent a letter to Energy Secretary Jennifer Granholm. In this letter, they expressed their opposition to the suggested modifications in the U.S. LNG export permitting procedure. They stated:

While our European allies have made significant strides in reducing their reliance on Russian natural gas thanks to American energy producers, Europe faces a considerable supply gap over the long-term that should be met by American energy, not hostile nations. Moving forward with a pause on U.S. LNG export approvals would only bolster Russian influence and undercut President Biden’s own commitment to supply our allies with reliable energy, undermining American credibility and threatening American jobs. An analysis of the President’s pledge to Europe found that the benefits to the United States could include $63 billion in capital expenditures, a GDP boost of $46 billion, and 71,500 jobs supported annually from 2025-2030.

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