According to two sources familiar with the situation, the Biden administration’s evaluation of proposed natural gas export terminals is projected to take approximately 15 months. This could potentially slow down the rapidly expanding industry and conflict with certain foreign policy goals of the president.
The Energy Department’s evaluation of new liquefied natural gas and its impact on the public interest, which was initially reported by POLITICO last week, will also consider the industry’s contribution to climate change and the environmental effects on the communities where the gas is processed and transported via tanker.
The White House is scheduled to announce on Friday, although there is a possibility that it may be delayed to early next week due to last-minute preparations. This information comes from two individuals who have been given permission to discuss policies that have not yet been made public.
The assessment halts the progress of CP2, a large-scale export initiative by Venture Global LNG intended for the coast of Louisiana. Various environmental organizations have urged the Biden administration to cancel the project, claiming that it will commit the transportation of fossil fuels for an extended period of time and exacerbate the effects of climate change.
The United States is currently the top global producer of natural gas, with a significant increase in exports since the development of new export terminals eight years ago. As the primary source of LNG, U.S. shipments have aided Europe in decreasing its reliance on Russian supplies following Russia’s invasion of Ukraine.
One person from the administration stated that they believe “we need to pause.” They also mentioned that they want to increase our exports, which are already the biggest in the world, and suggested taking a break to reorganize.
Delaying the approval of new permits for LNG exports until after the November election may ease concerns of environmental organizations. These groups have made the export of natural gas from the U.S. a key factor in Biden’s reelection campaign. Despite strong opposition from the oil and gas industry, officials in the White House are confident that the temporary ban on new permits will not hinder the current supply of U.S. natural gas shipments in the global market. Additionally, there are already multiple U.S. projects with existing permits that are currently being built.
According to sources, the ongoing review will not stop the operation of the eight existing LNG export facilities. These facilities currently export 12 billion cubic feet of gas per day, which accounts for 10% of the United States’ total gas production, as reported by the U.S. Energy Information Administration. The review will also not hinder the progress of the 10 projects that have already been granted export permits by the Department of Energy and are currently being constructed. Once completed, these new projects are expected to double the amount of U.S. LNG being sold in the market by 2028, according to data from the EIA.
The review will pause any new permits for 10 more projects that have requested DOE permits but have not yet received them. This includes projects whose supporters have not decided whether or not to proceed with construction.
Energy Secretary Jennifer Granholm, White House clean energy advisor John Podesta, climate advisor Ali Zaidi and White House energy security advisor Amos Hochstein have helped craft the review’s language, the sources said. The review will look to update how DOE weighs climate change, environmental justice and domestic economic impacts when considering new applications to export LNG to countries with which the United States does not have a free trade agreement.
A representative from Venture Global strongly criticized the notion of the administration potentially implementing a halt on new permits.
According to VG spokesperson Shaylyn Hynes, this action would greatly surprise the worldwide energy market and have a similar effect to an economic punishment. It would also convey a destructive message to our allies, indicating that they can no longer depend on the United States.
A representative from the White House declined to provide a statement.