While it is no secret that climate campaigners and environmental activists have upped their efforts to halt the further build-out of fossil fuel infrastructure, including LNG projects, the U.S. oil and gas industry is far from being in dire straits, especially after U.S. LNG exports reached monthly and annual record highs in December 2023. The energy market analysts are under the impression that this rise positioned the U.S. to become the largest exporter of LNG in 2023.
The Biden-Harris administration revealed a temporary pause on pending decisions on exports of LNG to non-FTA countries on Friday, January 26, 2024. This hiatus is expected to be in place until the Department of Energy can update the underlying economic and environmental analyses for authorizations, which are around five years old and considered to “no longer adequately account for considerations like potential energy cost increases for American consumers and manufacturers beyond current authorizations or the latest assessment of the impact of greenhouse gas emissions,” according to the White House.
“Today, we have an evolving understanding of the market need for LNG, the long-term supply of LNG, and the perilous impacts of methane on our planet. We also must adequately guard against risks to the health of our communities, especially frontline communities in the United States who disproportionately shoulder the burden of pollution from new export facilities. The pause, which is subject to exception for unanticipated and immediate national security emergencies, will provide the time to integrate these critical considerations,” elaborated the Biden-Harris administration.
While acknowledging not only that the U.S. is already the number one exporter of LNG worldwide but also that its exports are set to double by the end of 2030, the White House sought to reassure its allies of its unwavering support. To this end, the Biden administration emphasized that the temporary pause would not impact America’s ability to continue supplying LNG to its allies in the near term through existing LNG production and export infrastructure.
“As Republicans in Congress continue to deny the very existence of climate change while attempting to strip their constituents of the economic, environmental and health benefits of the President’s historic climate investments, the Biden-Harris administration will continue to lead the way in ambitious climate action while ensuring the American economy remains the envy of the world,” highlighted the White House.
In response to the LNG permit pause, which the oil and gas lobby sees as a disruption of the development of U.S. LNG infrastructure, the American Petroleum Institute (API) warned that such a move would undercut President Biden’s pledge to send roughly 5 billion cubic feet per day of LNG through 2030 to Europe to help end its dependence on Russian gas, as U.S. LNG is said to be “critical” for helping Europe replace Russian gas.
Mike Sommers, API’s President and CEO, commented: “This would be 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.”
Furthermore, API points out that an analysis of President Biden’s pledge found that its economic impact on the American economy could be as high as 71,500 jobs per year, $63 billion in capital expenditures, and a GDP boost of $46 billion between 2025 and 2030. The U.S. sent more than 800 LNG cargoes to Europe in 2022, which represents a 141% increase from 2021. A recent study shows that Europe likely faces a looming natural gas supply gap that threatens its long-term energy security.
According to the International Energy Agency (IEA), natural gas prices in the U.S. remain among the lowest in the world, as domestic prices declined 62% and natural gas production rose to record levels while U.S. LNG exports reached record highs in 2023. API believes that this demonstrates the oil and gas industry’s ability to meet rising global demand and maintain a well-supplied domestic market. The American Petroleum Institute joined dozens of other industry groups in urging the Biden administration to reject calls to halt permits for U.S. LNG export facilities.
“U.S. LNG can accelerate global emissions reductions by displacing higher-emitting fuels. Coal-to-gas switching is the main reason that the U.S. has led the world in reducing CO2 emissions over the past two decades. Global coal consumption continues to surge, likely reaching another all-time high in 2023. By 2024, three out of every four tons of coal consumed will occur in China, India and Southeast Asia. LNG can displace higher-emitting fuels like coal, allowing these countries advance their respective climate goals,” underscored API.
The Natural Allies Leadership Council has also urged President Biden in a letter to reject “any effort by a small group of advisors to reduce, delay or otherwise pause the export of American natural gas, which is one of our nation’s greatest and most valuable assets. Moving forward, natural gas exports can help pave the way for lower global emissions and enhanced global security.”
Natural Allies for a Clean Energy Future, which supports the expansion of renewables, the development of new technologies like carbon capture and hydrogen, and the use of natural gas as a foundation to accelerate clean energy goals, reminded Biden that two-thirds of Americans, including a majority of Democrats, agreed in a June 2023 Pew Research Study that the U.S. should promote a mix of fossil fuels and renewables.
“We strongly believe that exports of natural gas must continue without pause as the facts and evidence clearly demonstrate this to be in our national interest. Mr. President, our 100-year supply of natural gas is an asset, not a liability, in our fight against climate change and necessary to fulfill your often repeated promise of creating and restoring manufacturing jobs across our country,” emphasized Sen. Mary Landrieu from Natural Allies Leadership Council.
The media has already gone berserk over the 2024 elections in the United States, which are shaping up to be a referendum on a lot of things, including green energy, global security, NATO, and democracy as we understand it today. Will the U.S. entrench its democratic values and become an even better place after these elections or will things spiral out of control, ripping the global safety fabric in the process?
Regardless of whether one is an ardent pro-Democrat, President Joe Biden supporter and hater of former President Donald Trump, or fervent pro-Republican and Trump lover, no one can deny that the next person who gets a seat in the White House has an immense responsibility not just to ensure the safety and economic wellbeing of all Americans but also to preserve the global order and the survival of democratic values in these trying times, inflamed by rising tensions due to ongoing conflicts and bloodshed in various countries around the globe.
The Ukraine and Israel-Gaza crises are taking up most of the space in media reports, but many more worldwide energy and security challenges are also running in the background, threatening to erupt at first chance. The 2024 U.S. elections will show whether Biden, Trump, or someone new will be picked to tackle these and many other issues.
Will U.S. policymakers focus on a long-term energy plan that bolsters energy independence, seizes America’s energy advantage, and accelerates energy innovation after the elections?