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Released January 26, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Biden administration on Friday paused its review of pending liquefied natural gas (LNG) export projects in order to assess the impact of those proposed projects on climate change. The move would not affect operating or already-permitted projects, administration officials said.
The formal announcement followed days of background and off-the-record conversations between administration officials and reporters, a longstanding Washington, D.C. process used by elected officials from both sides of the partisan aisle to test the waters before making public a potentially controversial decision. In this case, the administrations pre-announcement "trial balloons" drew the fire of fossil fuel groups but were cheered by environmental groups.
"My Administration is announcing today a temporary pause on pending decisions of Liquefied Natural Gas exports--with the exception of unanticipated and immediate national security emergencies," the president said in a statement posted to the White House press office early Friday morning. "During this period, we will take a hard look at the impacts of LNG exports on energy costs, America's energy security, and our environment. This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time."
"From Day One," the president continued, "my administration has set the United States on an unprecedented course to tackle the climate crisis at home and abroad--securing the largest climate investment in the history of the world, unlocking clean energy breakthroughs that will power a clean economy and create thousands of jobs, advancing environmental justice for all, and rallying world leaders to transition away from the fossil fuels that jeopardize our planet and our people."
The White House statement didn't specify which terminal permit applications would be affected, not did it say how long the pause would last. News reports have said between one and four permit requests could be affected.
In a call with reporters Thursday previewing the announcement, Energy Secretary Jennifer Granholm said the process wouldn't affect already authorized exports or gas exports to U.S. allies, including Europe, which has relied heavily on American gas since Russia's invasion of Ukraine, according to a report in The Wall Street Journal.
A total of 17 proposed LNG export terminals have been proposed as part of a U.S. buildout of LNG export capacity. Currently, seven operating export terminals export about 14 billion cubic feet of gas in liquid form every day. With the projects that are permitted and under construction, that number could exceed 25 Bcf/d by 2028.
Click on the image at right for an Industrial Info graph showing LNG export capacities in operation and under construction.
Shane Mullins, Industrial Info's vice president of energy products and project development, took a critical view of the Biden administration's move, saying the production of natural gas and its transport abroad as LNG are in the best environmental interest of the U.S., particularly as an alternative to coal, which is still thriving as a fuel across the globe. Mullins made several other points regarding the potential consequences of the pause of pending LNG projects, including:
The pause is expected to delay final permitting decisions until after the November presidential elections, making Friday's decision a potentially hot-button election-year issue.
While Biden's statement slammed "MAGA Republicans (who) willfully deny the urgency of the climate crisis," Republicans fired back.
In a Senate floor speech before the administration's pause was confirmed, Senate Majority Leader Mitch McConnell (R-Kentucky), said the move "will only send energy costs higher at a time when the West is trying to reduce its reliance on Russian energy. It's directly at odds with America's interests on the world stage. This agenda is not just bad for America at home, it's directly at odds with America's interests on the world stage."
The U.S. is the world's largest producer of natural gas and exporter of LNG, but it is racing with other nations, notably Qatar, to expand export capacity and capture an increased share of what is expected to be a growing global market.
Early Friday morning, after the White House confirmed the pause, Mike Sommers, president and chief executive of the American Petroleum Institute (API) (Washington, D.C.), issued a statement that said, in part, "This is a win for Russia and a loss for American allies, U.S. jobs and global climate progress. There is no review needed to understand the clear benefits of U.S. LNG for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels. This is nothing more than a broken promise to U.S. allies, and it's time for the administration to stop playing politics with global energy security."
Environmentalists have been pushing to pause LNG permitting for some time. In December, noting the U.S. commitment at the COP28 climate summit to transition away from fossil fuels, a group of 150 scientists sent a letter to the president urging a pause in permitting new LNG facilities due to their potential to make worse climate change. "The magnitude of the proposed build out of LNG over the next several years is staggering," they wrote, according to a report in The New York Times. Approving new terminals would "put us on a continued path toward escalating climate chaos," the letter said.
Climate activist Bill McGibbon welcomed the president's move. "With this decision, President Biden--who already can claim to have done more to bolster clean energy than any of his predecessors--has also done more to check dirty energy, halting the largest fossil fuel expansion in history."
LNG export projects first must be approved by the Federal Energy Regulatory Commission (FERC), an independent branch of the DOE, before DOE reviews the application. Prior export terminal project approvals did not include any assessment of how the terminals, once operation, could affect climate change.
In a call with reporters Thursday previewing the announcement, Granholm said the process wouldn't affect already authorized exports or gas exports to U.S. allies, including Europe, which has relied heavily on American gas since Russia's invasion of Ukraine.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The formal announcement followed days of background and off-the-record conversations between administration officials and reporters, a longstanding Washington, D.C. process used by elected officials from both sides of the partisan aisle to test the waters before making public a potentially controversial decision. In this case, the administrations pre-announcement "trial balloons" drew the fire of fossil fuel groups but were cheered by environmental groups.
"My Administration is announcing today a temporary pause on pending decisions of Liquefied Natural Gas exports--with the exception of unanticipated and immediate national security emergencies," the president said in a statement posted to the White House press office early Friday morning. "During this period, we will take a hard look at the impacts of LNG exports on energy costs, America's energy security, and our environment. This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time."
"From Day One," the president continued, "my administration has set the United States on an unprecedented course to tackle the climate crisis at home and abroad--securing the largest climate investment in the history of the world, unlocking clean energy breakthroughs that will power a clean economy and create thousands of jobs, advancing environmental justice for all, and rallying world leaders to transition away from the fossil fuels that jeopardize our planet and our people."
The White House statement didn't specify which terminal permit applications would be affected, not did it say how long the pause would last. News reports have said between one and four permit requests could be affected.
In a call with reporters Thursday previewing the announcement, Energy Secretary Jennifer Granholm said the process wouldn't affect already authorized exports or gas exports to U.S. allies, including Europe, which has relied heavily on American gas since Russia's invasion of Ukraine, according to a report in The Wall Street Journal.
A total of 17 proposed LNG export terminals have been proposed as part of a U.S. buildout of LNG export capacity. Currently, seven operating export terminals export about 14 billion cubic feet of gas in liquid form every day. With the projects that are permitted and under construction, that number could exceed 25 Bcf/d by 2028.
Shane Mullins, Industrial Info's vice president of energy products and project development, took a critical view of the Biden administration's move, saying the production of natural gas and its transport abroad as LNG are in the best environmental interest of the U.S., particularly as an alternative to coal, which is still thriving as a fuel across the globe. Mullins made several other points regarding the potential consequences of the pause of pending LNG projects, including:
- Geopolitical leverage with Europe would be at risk
- It would push Germany back to Russia for supply
- European support for Ukraine would dwindle
- An invasion of Taiwan by China would likely move ahead
- Growing supplies of non-oil tied to LNG from the U.S. is key to the energy transition. As an example, Vietnam has critical minerals for the energy transition but needs low-cost energy from U.S. in the form of more LNG.
The pause is expected to delay final permitting decisions until after the November presidential elections, making Friday's decision a potentially hot-button election-year issue.
While Biden's statement slammed "MAGA Republicans (who) willfully deny the urgency of the climate crisis," Republicans fired back.
In a Senate floor speech before the administration's pause was confirmed, Senate Majority Leader Mitch McConnell (R-Kentucky), said the move "will only send energy costs higher at a time when the West is trying to reduce its reliance on Russian energy. It's directly at odds with America's interests on the world stage. This agenda is not just bad for America at home, it's directly at odds with America's interests on the world stage."
The U.S. is the world's largest producer of natural gas and exporter of LNG, but it is racing with other nations, notably Qatar, to expand export capacity and capture an increased share of what is expected to be a growing global market.
Early Friday morning, after the White House confirmed the pause, Mike Sommers, president and chief executive of the American Petroleum Institute (API) (Washington, D.C.), issued a statement that said, in part, "This is a win for Russia and a loss for American allies, U.S. jobs and global climate progress. There is no review needed to understand the clear benefits of U.S. LNG for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels. This is nothing more than a broken promise to U.S. allies, and it's time for the administration to stop playing politics with global energy security."
Environmentalists have been pushing to pause LNG permitting for some time. In December, noting the U.S. commitment at the COP28 climate summit to transition away from fossil fuels, a group of 150 scientists sent a letter to the president urging a pause in permitting new LNG facilities due to their potential to make worse climate change. "The magnitude of the proposed build out of LNG over the next several years is staggering," they wrote, according to a report in The New York Times. Approving new terminals would "put us on a continued path toward escalating climate chaos," the letter said.
Climate activist Bill McGibbon welcomed the president's move. "With this decision, President Biden--who already can claim to have done more to bolster clean energy than any of his predecessors--has also done more to check dirty energy, halting the largest fossil fuel expansion in history."
LNG export projects first must be approved by the Federal Energy Regulatory Commission (FERC), an independent branch of the DOE, before DOE reviews the application. Prior export terminal project approvals did not include any assessment of how the terminals, once operation, could affect climate change.
In a call with reporters Thursday previewing the announcement, Granholm said the process wouldn't affect already authorized exports or gas exports to U.S. allies, including Europe, which has relied heavily on American gas since Russia's invasion of Ukraine.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
