Liquefied Natural Gas: What to know about LNG and Biden's decision to delay gas export proposals


MATTHEW DALY
Fri, January 26, 2024 


WASHINGTON (AP) — The Biden administration said Friday it is delaying consideration of new natural gas export terminals i n the United States, even as gas shipments to Europe and Asia have soared since Russia’s invasion of Ukraine.

The decision by President Joe Biden, announced as the 2024 presidential election year kicks off, aligns the Democratic president with environmentalists who fear the huge increase in exports of liquefied natural gas, or LNG, is locking in potentially catastrophic planet-warming emissions when Biden has pledged to cut climate pollution in half by 2030.

Industry groups and Republicans condemned the pause as a “win for Russia,” while environmentalists cheered it as a way to address climate change and counter Biden’s approval of the huge Willow oil project in Alaska last year.

What is LNG and why does it matter?

LNG is short for liquefied natural gas and occurs when gas is cooled to about –260° F (–162° C), changing it into a liquid that can be stored and shipped safely aboard specially designed vessels to destinations around the globe. Upon arrival, the gas is reheated to return it to a gaseous state and transported by pipeline to distribution companies, industrial consumers and power plants.

Natural gas is used to heat homes and businesses, and is often produced in the United States through a technique known as fracking that has unlocked vast supplies underneath the ground. U.S. gas exports rose sharply after Russia’s February 2022 invasion of Ukraine, and the Biden administration has celebrated the delivery of U.S. gas to Europe and Asia as a key geopolitical weapon against Russian President Vladimir Putin, allowing U.S. allies to use gas without relying on Russia.

Why did Biden delay consideration of LNG export terminals?

The decision is complicated because Biden has praised U.S. exports in the past. But he has faced strong criticism from environmental groups who worry about the rapid expansion of LNG exports in recent years and question Biden's commitment to phasing out fossil fuels such as oil and gas. U.S. oil production has surged since Biden took office.

U.S. LNG capacity has doubled in recent years and is set to double again under projects already approved, the White House said. Current methods the Energy Department uses to evaluate LNG projects don’t adequately account for potential cost hikes for American consumers and manufacturers or the impact of greenhouse gas emissions, officials said.

"There’s a long runway here (for LNG projects) and we’re taking a step back and thinking, okay, let’s take a hard look before that runway continues to build out,'' said White House climate adviser Ali Zaidi.

What does Biden's action do?

The pause will allow officials to update the way the Energy Department analyzes LNG proposals to "avoid export authorizations that diminish our domestic energy availability, weaken our security or undermine our economy'' or the environment, Energy Secretary Jennifer Granholm said.

The pause will have no immediate effect on U.S. gas supplies to Europe or Asia, she said. Seven LNG terminals are currently operating in the U.S., mostly in Louisiana and Texas, with up to five more expected to come online in the next few years. Biden's action would not affect those projects, but could delay a dozen or more LNG projects that are pending or in various stages of planning. That includes the Calcasieu Pass 2 project, or CP2, along Louisiana’s Gulf Coast. If built, CP2 would be the largest export terminal in the United States.

“Let me be clear. The U.S. is already the number one exporter of LNG, and we remain unwavering in our commitment to support our allies and partners around the world,″ Zaidi said Friday.

If necessary, the Energy Department can allow exceptions for national security needs, he and Granholm said.

How long will the pause last?

Granholm and other officials declined to say how long the permitting pause will last, but said officials will study how proposed LNG projects will affect the environment, the economy and national security, a process that will take "some months." A public comment period after that will likely delay any decisions on pending LNG projects until after the November election.

What do climate activists and Democrats say about Biden's action?

Environmentalists hailed Biden's decision, saying LNG exports not only pollute communities and add to the climate crisis but also raise energy prices for U.S. families and businesses.

Abigail Dillen, president of the environmental group Earthjustice, called on the Biden administration to follow through on its commitments to climate action and environmental justice ”and stop dangerous fossil fuel infrastructure'' such as LNG terminals. Most such facilities are located in the South in communities of color and low-income areas “that are already overburdened by fossil fuel pollution and are on the frontlines of climate change,″ she said.

Sen. Ed Markey, D-Mass., called Biden’s action a “much-needed move to protect American communities from export-driven pollution and profiteering.”

What do industry groups and Republicans say?

The American Petroleum Institute, the largest lobbying group for the oil and gas industry, called Biden’s action "a win for Russia and a loss for American allies, U.S. jobs and global climate progress.''

Mike Sommers, API’s president and CEO, said no review is needed to "understand the clear benefits of U.S. LNG (exports) for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels″ and away from coal.

Senate Minority Leader Mitch McConnell, R-Kentucky, called the move “foolish” and said it could increase global reliance on Russian and Iranian energy at a time when "our allies in Europe are increasingly relying on us to keep their lights and their heat running.''

What impact could Biden's decision have on the 2024 presidential race?

Biden is hoping the decision helps him win back young voters disenchanted by his administration's approval of the massive Willow oil project and his support for Israel's continued military offensive in Gaza following the deadly attack by Hamas in October.

“We will heed the calls of young people and frontline communities who are using their voices to demand action from those with the power to act,″ the president said in announcing the pause.

A single proposed LNG export terminal in Louisiana would produce about 20 times the greenhouse gas emissions of Willow, activists say.

“Biden wants young people, who care about climate above all, in his corner. They were angry about his dumb approval of the Willow oil project,″ said environmental activist Bill McKibben.

Republicans portray Biden as pushing a Green New Deal that they consider radical and even un-American. Former President Donald Trump, the GOP frontrunner in 2024, has said he will seek to reestablish U.S. energy “dominance” and says one of his first actions, if returned to office, is to "drill, dill drill.''

A spokeswoman for Trump’s campaign said Biden had “once again caved to the radical demands of the environmental extremists in his administration.” The decision to block approval of new LNG export facilities “is one more disastrous self-inflicted wound that will further undermine America’s economic and national security,″ said spokeswoman Karoline Leavitt.