The Biden administration is anticipated to conduct a comprehensive 15-month review of new natural gas export terminals, as per sources familiar with the planning. The review, focused on the Energy Department’s evaluation process for liquefied natural gas (LNG) projects, will delve into the industry’s impact on climate change and environmental effects on local communities.
Expected to be announced by the White House, the review’s primary aim is to assess whether new LNG projects align with the public interest.
This move casts a shadow on the development of CP2, a significant export project by Venture Global LNG planned for coastal Louisiana. Environmental groups have urged the administration to halt the project, expressing concerns that it would prolong fossil fuel shipments, exacerbating climate change issues.
Joe Biden (Credits: San Diego Union-Tribune)
As the world’s largest producer of natural gas, the United States has witnessed a surge in LNG exports over the past eight years. The country’s LNG shipments have played a crucial role in helping Europe reduce its reliance on Russian gas amid geopolitical tensions.
The administration’s decision to pause approvals for new LNG export permits until after the November election may appease environmental advocates, who view U.S. natural gas exports as a key criterion for evaluating President Biden’s environmental policies.
The administration emphasizes the need to reassess the situation, considering the United States’ current status as the leading global LNG exporter, with plans to double its capacity. The review aims to provide clarity and address concerns raised by environmental groups.
Despite opposition from the oil and gas industry, White House officials are confident that the moratorium will not disrupt existing U.S. natural gas shipments, given the well-supplied global market and ongoing projects with existing permits.
The review will not impact the operation of the eight existing LNG export plants, which collectively ship approximately 10% of the country’s total gas production.
Similarly, the ongoing construction of 10 projects with existing DOE export permits will proceed without interruption, effectively doubling U.S. LNG exports by 2028, according to the U.S. Energy Information Administration.
Key officials involved in crafting the review’s language include Energy Secretary Jennifer Granholm, White House clean energy advisor John Podesta, climate advisor Ali Zaidi, and White House energy security advisor Amos Hochstein.
The review seeks to update the evaluation criteria for new LNG export applications, taking into account climate change considerations, environmental justice, and domestic economic impacts, especially for countries without a free trade agreement with the United States.
Venture Global criticized the potential moratorium on new permits, describing it as a measure that would shock the global energy market, akin to an economic sanction, and convey a damaging signal to U.S. allies.
