16 states file suit challenging pause on LNG export permits

Led by Louisiana General Attorney General Liz Murrill, the attorneys general of 16 states have filed suit in the U.S. District Court for the Southern District of Louisiana challenging the pause on pending approvals of LNG export projects announced by the Biden administration in January.

Attorney General Murrill calls that move an “unlawful decision to ban new liquefied natural gas (LNG) exports.”

The State of Louisiana is joined in the suit by the States of Alabama, Alaska, Arkansas, Florida, Georgia, Kansas, Mississippi, Montana, Nebraska, Oklahoma, South Carolina, Texas, Utah, West Virginia, and Wyoming.

“On January 26, 2024, President Biden and his Department of Energy halted all new approvals of LNG exports to non-Free-Trade Agreement countries effective immediately,” says the Louisiana Attorney General’s office. “This decision ignores the clear text of the Natural Gas Act and departs from decades of agency policy. Just six months ago, the Department of Energy even acknowledged, ‘There is no factual or legal basis’ for halting approval of LNG exports.

“Biden’s decision causes serious harm to Plaintiff States, local communities counting on LNG-related investment, and the energy sector itself. This ban will also disrupt the development and production of natural gas and gives us no choice but to turn to the courts to enforce the law.”

DETRIMENTAL EFFECTS

The administration decision has been widely condemned by industry.

“Pausing U.S. LNG export permits will have detrimental effects on the U.S., the Gulf Coast, and our allies, disrupting a crucial global energy source that offers stability and affordability. This decision also puts a pause to billions of dollars in investments along the Gulf Coast,” said the National Ocean Industry Association, when the pause was announced.

“Ordinary citizens in the U.S. and Europe will bear the costs of arbitrarily forfeiting a competitive market advantage to countries like Russia, a major LNG exporter. While Europe primarily imports LNG from the U.S., it still receives a substantial amount from Russia, which will undoubtedly exploit the decision.

“Moreover, tens of thousands of jobs and billions in wages along the Gulf Coast are tied to the growth of LNG facilities. The benefits of domestic LNG growth is bolstered by the fact that, according to Carnegie Mellon University, switching all U.S. coal plants to natural gas would substantially reduce sulfur dioxide and nitrogen oxide emissions and reduce national healthcare costs by $20 – 50 billion annually. The U.S. stands to transfer these benefits to the rest of the world through the displacement of coal with U.S. LNG.

“Overall, the U.S. LNG export permitting pause will diminish energy security, stability, and affordability, while impeding progress in emission reduction efforts.”

NO PUBLIC SUPPORT

A new poll recently carried out by the National Association of Manufacturers showed bipartisan opposition to the freeze on export permits for new LNG projects.

The NAM analytics team conducted the poll March 15–18 and collected 1,000 responses from a nationwide sample of registered voters. You can see the full results here, but key findings were:

• 87% of respondents agree the U.S. should continue to export natural gas.
• 76% of respondents agree with building more energy infrastructure, such as port terminals, here in the U.S.
• 74% of respondents agree with boosting production of domestic oil and natural gas in the U.S. instead of depending heavily on foreign energy sources.
• 72% of respondents prefer that American energy policy use an all-of-the-above strategy that includes oil and natural gas and renewable energy sources.
• 86% of respondents agree that we should change the permitting system so it doesn’t take so long for new energy infrastructure projects to be approved.

LOW DOMESTIC LNG PRICES AS EXPORTS SURGE

The move by the 16 states comes within days of the American Petroleum Institute (API) releasing a new analysis showing that Americans benefit from among the lowest residential natural gas prices globally even as the U.S. leads the world in LNG exports. The report, conducted by Energy Ventures Analysis, demonstrates the American natural gas industry’s record of supporting allies abroad while maintaining a well-supplied domestic market at home.

“Thanks to America’s enormous resources and constant industry innovation, U.S. producers have shown time and again that we can meet domestic demand while still being a leading supplier to rapidly expanding global markets. The administration’s misguided LNG freeze threatens American jobs and jeopardizes global energy security,” API senior vice president of policy, economics and regulatory affairs Dustin Meyer said. “If policymakers are truly committed to energy affordability, they should focus on on smart policies that remove hurdles to increasing natural gas production and developing critical infrastructure.”

Download the Attorneys General filing HERE