President Joe Biden made a significant move on Friday by placing a temporary halt on pending approvals for exports from new liquefied natural gas (LNG) projects, a decision celebrated by climate activists.
This pause in approvals has the potential to delay decisions on new LNG plants until after the November 5 election.
The Department of Energy (DOE) will conduct a comprehensive review during this pause, focusing on the economic and environmental impacts of projects seeking approval to export LNG to high-demand regions in Europe and Asia.
Energy Secretary Jennifer Granholm stated that this review will take several months and will be followed by a period of public comment, further extending the timeline.
In a statement, President Biden expressed the need to scrutinize the impacts of LNG exports on energy costs, America’s energy security, and the environment.
He emphasized that this pause recognizes the climate crisis as an existential threat.
Administration officials reassured that national security would not be compromised, as the plan includes exemptions for security needs related to LNG.
European nations are concerned about a stable supply of U.S. gas as they attempt to reduce reliance on Russian pipelined gas after Russia’s 2022 invasion of Ukraine.
Similarly, Asian allies are eager for LNG to reduce coal consumption.
The U.S. has seen a substantial increase in LNG export capacity, becoming the world’s leading LNG exporter in the previous year.
This growth has triggered protests from environmentalists, who argue that new LNG projects can harm local communities, perpetuate fossil fuel reliance, and contribute to methane emissions.
Environmentalists lauded this decision as a significant step towards phasing out fossil fuels and addressing the climate crisis.
However, various U.S. industries, including chemicals, steel, food, and agriculture, oppose unrestricted gas exports, citing concerns about fuel prices and reliability.
The pause will affect only four projects with pending export approvals at the DOE. While the names were not disclosed, they could potentially include projects by Sempra Infrastructure, Commonwealth LNG, and Energy Transfer.
Sempra is confident that its projects will help reduce carbon-intensive fossil fuel consumption and provide gas to allies, while the other companies have yet to comment on the matter.
One prominent project, Venture Global’s Calcasieu Pass 2 (CP2) LNG project in Louisiana, will not be affected by the pause, as it requires approval from the Federal Energy Regulatory Commission first.
However, this commission could approve CP2 as early as February, subsequently passing the approval to the DOE.
This decision has raised questions about the potential over-expansion of LNG projects and their implications.
Germany relies heavily on CP2’s contracted LNG capacity, and any delays could have significant consequences for U.S. alliances.