Biden administration pauses new LNG export project permitting

LNG carrier loading at Cheniere U.S. LNG export terminal

Citing climate crisis concerns, the Biden Administration today announced a temporary pause on pending approvals of liquefied natural gas (LNG) export projects.

The U.S. Department of Energy (DOE) says that it will initiate a process to update the assessments used to inform whether additional liquefied natural gas (LNG) export authorization requests to non-Free Trade Agreement countries are in the public interest.

“The United States is the global leader in LNG exports with 14 billion cubic feet per day (Bcf/d) in current operating capacity and 48 Bcf/d in total authorizations approved by DOE to date, over three times our current export capacity,” DOE said. “DOE has been given the responsibility by Congress to evaluate the public interest of proposed exports to countries with which the United States does not have a Free Trade Agreement. As the natural gas sector has transformed over the past decade, DOE must use the most complete, updated, and robust analysis possible on market, economic, national security, environmental considerations, including current authorized exports compared to domestic supply, energy security, greenhouse gas emissions including carbon dioxide and methane, and other factors. Today’s action will begin an update of this analysis, and until updated, DOE will pause determinations on pending applications for export of LNG to non-Free Trade Agreement countries.”

DOE says the temporary pause on pending LNG export project applications will not affect already authorized exports, which total 48 Bcf/d.

“It will also not impact our ability to supply our allies in Europe, Asia or other recipients of already authorized U.S. exports,” says DOE. “Last year, over 60% of U.S. LNG exports went to Europe, and we have worked with European countries to successfully economize consumption and manage their storage to ensure that Russia cannot threaten their security of supply. Within this decade another 12 Bcf/d of U.S. export capacity already authorized and under construction will come online – enabling exports to nearly double and putting the U.S. on track to exceed the export capacity of any other country by more than 50%, even taking into account planned global LNG expansion capacity.”

“This increased capacity has and will continue to support our European, Asian and other allies. Just as it has since 2022 when U.S. LNG played a critical role in helping Europe backfill its lost gas supplies from Russia and reduce its energy dependence following Putin’s invasion of Ukraine. “

There are 17 LNG projects in the pipeline (you can see the list HERE). From a U.S. domestic marine industry perspective, all are seen as important markets for companies such as dredging and port construction contractors and providers of port services, such as escort tugs and pilotage.

One project in particular, Venture Global LNG’s CP2 project in Cameron Parish, La., seems to have drawn the ire of environmental activists who, reportedly, had been planning a sit-in at the Department of Energy headquarters in Washington D.C. from February 6-8, to call for the permitting pause.

INDUSTRY GROUPS RESPOND

Even before the pause on LNG export approvals was officially announced, the American Petroleum Institute (API) yesterday joined the American Exploration and Production Council (AXPC), Center for LNG (CLNG), Independent Petroleum Association of America (IPAA), LNG Allies, and dozens of other industry groups from across the LNG value chain in urging the Biden administration to reject calls to halt permits for U.S. LNG export facilities.

“Our nation’s abundant supply of natural gas is an impactful geopolitical tool, helping insulate American consumers from increasing global instability while advancing American national interests and ensuring the energy security of key U.S. allies,” the groups wrote in a letter to Energy Secretary Jennifer Granholm. “Moving forward with a pause on new 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.”

“Nearly eight years of operating experience and DOE’s own studies have demonstrated that LNG exports are squarely within the public interest,” the groups wrote. “Throttling down U.S. LNG exports will eliminate an important tool in reducing global emissions and force quickly developing nations – specifically in Asia—to abandon plans to reduce emissions and increase coal consumption.”

The industry groups say that the administration has already extended a permitting process for LNG permits that took seven weeks during the last administration to an 11-month process on average. Any additional changes to LNG export permit approvals would be an unnecessary addition to an already burdensome bureaucratic process.

MANUFACTURERS OPPOSE PERMITTING PAUSE

Oil and gas interests are not alone in opposing the freeze on new LNG export permits for new liquified natural gas projects. Today, National Association of Manufacturers president and CEO Jay Timmons released the following statement:

“Once again the Biden administration’s agencies are undercutting President Biden’s own stated goals. The president has said the following:

‘Where is it written that America can’t lead the world in manufacturing again? … Now, thanks to all we’ve done, we’re exporting American products and creating American jobs.’

‘This nation used to lead the world in manufacturing, and we’re going to do it again.’

‘We just have to remember who we are. We’re the United States of America…There’s not a single thing we can’t do when we put our minds to it. And we can strengthen our energy security now, and we can build a clean energy economy for the future at the same time. This is totally within our capacity.’

‘[W]e’re working closely with Europe and our partners to develop a long-term strategy to reduce their dependence on Russian energy.’

‘[W]e’re a great nation. We’re the greatest nation on the face of the earth. We really are. That’s the America I see in our future.’

“Manufacturers call on the president to direct his agencies to support his agenda and to end their political war on the manufacturers who power American jobs, our economy and our national security. Today’s decision weakens our country, while giving Russia an upper hand as Europe and Asia look to transition their energy needs.”