The Biden Administration has made a significant move in its efforts to combat climate change by halting approvals for new liquefied natural gas (LNG) export terminals along the US coastline. This decision deals a blow to the booming LNG industry and gives a win to climate campaigners who argue that the expansion of LNG infrastructure will perpetuate reliance on fossil fuels. The pause in approvals will temporarily halt pending applications from 17 projects awaiting approval to proceed.
The US is currently the world’s largest exporter of LNG, with the number of cargoes shipped rapidly increasing since 2016. The European energy crisis triggered by Russia’s invasion of Ukraine further fueled demand for US LNG as countries sought alternatives to Russian gas. However, climate activists have targeted the industry, arguing that it will lock in dependence on fossil fuels for decades to come.
President Joe Biden, who is entering an election year, aims to secure the support of younger and climate-conscious voters who played a crucial role in his first term victory. Many of these voters felt let down after the administration gave approval to ConocoPhillips’ Willow oil project in Alaska last year. The pause on new LNG approvals aligns with Biden’s commitment to addressing the climate crisis, which he describes as the “existential threat of our time.”
The European Commission was informed about the US announcement in advance, with an EU energy official stating that the pause would not have any short-to-medium term impacts on the EU’s security of supply. The official emphasized the EU’s commitment to ensuring energy security while advancing domestic and global climate action.
US Energy Secretary Jennifer Granholm highlighted the need for her department to remain a responsible actor as US LNG exports surged. The department will assess whether the additional volumes are in the public interest, as required under federal law. Granholm assured that the pause would not affect already-authorized exports or impact the US’s ability to supply allies in Europe, Asia, or other recipients of authorized exports.
While natural gas is considered cleaner than other fossil fuel alternatives, it still releases significant amounts of carbon dioxide when burned. Additionally, methane, the main component of natural gas, is a potent greenhouse gas when leaked into the atmosphere. The Biden administration believes that the energy department’s current economic and environmental models, which are around five years old, no longer adequately account for the effects on energy costs or the latest assessments of emissions. The administration also aims to mitigate pollution risks for communities near new export facilities.
The US surpassed Qatar and Australia last year to become the world’s leading supplier of LNG. Its seven operating terminals can produce up to 87 million tonnes per year, satisfying the combined gas needs of Germany and France. Five more projects that are already approved and under construction will add another 63 million tonnes of capacity per year. However, projects further down the queue may be stalled unless the energy department resumes approvals.
Venture Global’s CP2 project in Louisiana, which is the largest proposed LNG project to date, has attracted extra scrutiny from campaigners. As reports of a potential halt to approvals spread, Venture Global warned that such a decision would “shock the global energy market” and send a devastating signal to US allies. Republican Senator John Cornyn from Texas criticized the project review as “climate wokeism” and argued that it jeopardizes national security and threatens the energy industry.
Overall, the Biden administration’s decision to pause approvals for new LNG export terminals is a significant step in its climate campaign. It showcases the administration’s commitment to addressing climate change and reducing reliance on fossil fuels. While there may be concerns about potential impacts on energy security and economic consequences, the administration believes that this pause is necessary to reassess the effects of LNG exports on energy costs, America’s energy security, and the environment.