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Biden Confirms Pause on New LNG Export Permits for DOE Review

LNG export terminal
Restoration of Freeport LNG's production helped the U.S. become the largest exporter in 2023 (Freeport LNG)

Published Jan 26, 2024 5:45 PM by The Maritime Executive

 

The administration of President Joe Biden confirmed today the earlier reports that it is launching a review of the U.S. approval process for new liquified natural gas (LNG) export permits in effect stalling out plans for the continued development of the export and shipping operations along the U.S. Gulf Coast. They are emphasizing that the review, which is likely to take months, has no impact on current exports but pauses pending decisions on exports to non-FTA (Free Trade Agreement) countries.

The move is considered highly political and immediately set off a firestorm of comments. Environmentalists are hailing the move citing the reports on the highly damaging effect of methane slip, the release of unburnt methane, and the dramatic growth in the U.S. industry. Political opponents and the oil and gas industry are lambasting the move as undermining the growth of a critical U.S. industry and sending a damaging signal to U.S. allies worldwide. The lobbying group representing the industry, the American Petroleum Institute, denounced the decision saying it would benefit Russia, despite the assurances by the U.S. Energy Department that it had alerted the European Union in advance of the announcement and that exports to continue under the current commitments.

The U.S. has emerged as the world’s largest exporter of LNG ahead of rivals Australia and Qatar. In 2023, U.S. exports were calculated by government statistics to have risen nearly 15 percent to just under 89 million metric tons with roughly 9 million tons exported just in the month of December. That is up from total exports of approximately 77 million metric tons in 2022. Well over half, or by some estimates nearly two-thirds, of U.S. exports go to Europe with Asia being the second-largest market for the U.S. 

The Biden administration in today’s announcement highlights the industry is expected to double its exports by the end of the current decade. They said the U.S. remains “unwavering in our commitment to support our allies. Today’s announcement will not impact our ability to continue supplying LNG to our allies in the near term.”

The decision was reportedly based on the fact that the current economic and environmental analysis the Department of Energy uses to authorize LNG exports dates to 2018. The White House announcement asserts the analysis “no longer adequately account for considerations like potential energy increases for American consumers and manufacturers … or the latest assessment of the impact of greenhouse gas emissions.”

The Department of Energy backed up the assertions reporting that when the last analysis was completed in 2018, the U.S. export capacity was less than 4 billion cubic feet a day. They said the industry has already tripled and is set to double yet again by 2030. 

DOE will require months to complete the review and then they will follow the draft with a period for public comments. Based on the expected timeline, the review will not be completed before the presidential election in November 2024, meaning this will likely become a centerpiece of the campaigns. U.S. energy policy and the moves of the Biden administration have already been hotly debated by politicians, the energy industry, and environmentalists.

The White House highlights that the U.S. for the past two years has exceeded its agreed export targets with the E.U. They are casting the issue within the broader context of climate change saying in their statement “Republicans in Congress continue to deny the very existence of climate change.”