President Biden directed the Energy Department on Friday to stop granting applications for new liquefied natural gas exports pending a review of how it can better factor climate change into its approvals.
The move jeopardizes major ongoing LNG projects and drew scorn from the oil and gas industry even before its official announcement. But it will please environmentalists, a core constituency for Mr. Biden in an election year.
In a statement Friday, Mr. Biden said he was responding to political pressure and the need to address climate change.
“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,” he said.
The U.S. has quickly become the world’s largest LNG exporter in recent years thanks to the Ukraine war causing Europe to switch from Russian gas.
“As our exports increase, we must review export applications using the most comprehensive up-to-date analysis of the economy, environment and national security conditions,” Energy Secretary Jennifer Granholm told reporters. “That’s why today, the Department of Energy is initiating an update to the process by which we make these assessments.”
That action, she continued, means a “pause” on all pending export applications to non-free trade agreement counties — which includes large U.S. LNG importers in Europe and Asia — “until the department can update the underlying analysis for authorities.”
The pause, which Ms. Granholm said would last at least several months, does not apply to existing LNG exports already approved by the administration.
A senior administration confirmed that four export permits awaiting final Energy Department approval, which have already gone through years of environmental, engineering and safety reviews at the Federal Energy Regulatory Commission (FERC), will be delayed.
Another official told reporters that the CP2 project in Louisiana, which would be the nation’s largest LNG export facility, would not immediately be affected by the pause because it’s earlier in the regulatory process — still looking for a greenlight from FERC.
Despite the pause not directly and immediately affecting CP2, the energy sector fears the new climate standards would put up environmental roadblocks for such projects once they get to the point of seeking final export approval.
The project’s owner, Venture Global, blasted the administration and echoed other critics who say the pause threatens Europe’s use of U.S. LNG and that it would actually worsen climate change by forcing other countries to turn to coal, a dirtier form of energy.
“Such an action would shock the global energy market, having the impact of an economic sanction, and send a devastating signal to our allies that they can no longer rely on the United States,” Venture Global spokeswoman Shaylyn Hynes said. “The true irony is this policy would hurt the climate and lead to increased emissions as it would force the world to pivot to coal.”
Dozens of oil and natural gas lobbying groups have offered similar warnings in recent days to Ms. Granholm and other senior administration officials.
White House National Climate Adviser Ali Zaidi, who also spoke to reporters, pitched that the moratorium on new LNG exports was evidence Mr. Biden “has been the climate president to his core.”
Mr. Biden has frequently drawn the ire of activists for refusing to stop new fossil fuel drilling on federal lands and waters, breaking a campaign promise.
“I’m sure you’ve heard from folks who will raise objections, who will maybe even toss out misleading information,” Mr. Zaidi said. “Joe Biden has been, I think, fearless from day one on climate change, fearless in that he has been unafraid to take bold action, unafraid to push for necessary change, and in this case, his administration is showing we are unafraid to follow the facts.”
Ms. Granholm said the new environmental review standards will be developed based on what is “in the public interest” and insisted the U.S. will not abandon its allies because existing LNG exports will continue.
“If needed, the department can determine if exceptions should be made for national security needs,” she said.
The oil and gas groups who lobbied against the pause didn’t buy the administration’s “public interest” arguments.
“Nearly eight years of operating experience and DOE’s own studies have demonstrated that LNG exports are squarely within the public interest,” they wrote in a recent letter to Ms. Granholm.
“Throttling down U.S. LNG exports will eliminate an important tool in reducing global emissions and force quickly developing nations — specifically in Asia — to abandon plans to reduce emissions and increase coal consumption,” the letter stated.