July 21, 2024

When the Biden administration suspended approval of new LNG exports in January, environmentalists and left-leaning politicians praised the decision as a watershed moment for the climate movement. After months of pressure from climate activists, the Department of Energy, or DOE, announced it will rethink how it evaluates the massive export projects that condense fracked gas into a supercooled liquid, known as LNG, and load it onto tankers that ship the fuel . for sale in Europe and Asia. Meanwhile, the administration has committed to keeping the LNG projects awaiting approval in a holding pattern, to prevent them from breaking ground.

The surprise move reportedly came after senior White House officials meet young climate activists who campaigned against LNG exports, and this appeared to be a shift in the trajectory of the industry, which received strong support from both the Obama and Trump administrations. 350.org founder and author Bill McKibben said the decision means President Biden has “done more to check dirty energy … than any of his predecessors.” (McKibben is also a former Grist board member.)

But just six months later, the pause looks like little more than a speed bump in the rapid growth of an industry that has changed the global energy mix. Even though the moratorium drew outraged oil and gas executives and angry protests from Republicans, its application was limited to just a few projects that were in the planning stages; it did not affect several large terminals that have already received approval or are under construction, which together will double US export capacity.

And earlier this week, a federal judge appointed by former President Donald Trump struck down the current administration’s policy. The Louisiana judge ruled that the Biden administration must still consider individual projects for approval even as it considers a broader shift in LNG export policy, limiting the impact of the pause that Biden officials said would be at least until the end. of the year would last, denied. With Biden’s chance to defeat the former president in the November election, it is becoming increasingly likely that his administration will not succeed at all in changing the country’s natural gas export policy.

“If it’s really over — you have a DOE going back to a presumption that LNG exports are in the public interest — that would have been a blip,” said Steven Miles, a research associate and natural gas expert at Rice University Baker Institute for Public Policy. “If this is going to be an opening salvo in an ongoing battle over every step in LNG exports, it will be trench warfare. It probably all depends on the election.”

When the DOE announced the pause in January, Energy Secretary Jennifer Granholm described it as a necessary effort to improve the government’s criteria for evaluating the massive export terminals that have sprung up along the Gulf of Mexico. to work. The United States has become the world’s largest exporter of liquefied natural gas, but officials still weren’t sure how the export boom has changed the world’s energy mix. Has sending so much gas overseas helped displace coal, a much more climate-unfriendly fuel, or has it stunted the growth of renewable energy? Was it to create jobs in gas-rich US states, or to drive up costs for electricity ratepayers and American companies – or both?

These questions are very difficult to answer, in part because they rely on counterfactual assessments of what would happen if the U.S. do not have export gas. Even since the pause went into effect, a flurry of new research has complicated the picture. On the one hand, a report of the Institute for Energy Economics and Financial Analysis, an energy think tank, found that gas exports to China are not helping to reduce coal consumption in the energy-hungry country, undermining a key argument for the industry. On the other hand, an economic paper published in March argued that exports drove up natural gas prices within the United States and thus encouraged substitutes for the fuel, acting in effect like a carbon tax and helping the country’s net-zero target as a result.

As the administration sought to answer these questions, it paused its review of a handful of LNG projects awaiting approval. Republicans and industry leaders have discouraged the move, saying it jeopardizes the country’s ability to supply fuel to foreign allies. In reality, it only delayed a few projects that had already received approval from the Federal Energy Regulatory Commission, or FERC, a separate independent regulator that was much friendlier to LNG projects.

The pause also hasn’t stopped FERC from continuing to push more projects over to the Department of Energy for approval: Just last week, the commission approved Venture Global’s Calcasieu Pass 2 Terminal, or CP2, a massive project that would be able to send out. 24 million metric tons of LNG per year, enough gas to power more than 15 million homes. It was the CP2 project that sparked many activists on TikTok and other social media platforms, which reportedly caught the attention of the Biden administration officials who pushed the pause in the first place.

White House climate adviser Ali Zaidi speaks during a press briefing on January 26, 2024 in Washington, DC.  Zaidi discussed the Biden administration's decision to suspend the permitting process for LNG exports.
White House climate adviser Ali Zaidi discusses the Biden administration’s decision to suspend the permitting process for LNG exports during a press briefing on January 26, 2024. Kevin Dietsch/Getty Images

In March, a group of sixteen Republican-led states sued the administration about the DOE’s regulatory hiatus, and they found a sympathetic audience in a Louisiana court. The judge, James Cain, appointed by Trump, ruled that the department did not have the authority to stop reviewing LNG export terminals, finding that the decision resulted in “the loss of revenue, market share and deprivation of a procedural right” for states like Louisiana and West Virginia.

For Roishetta Ozane, an activist in Lake Charles, Louisiana, who has led the charge against the LNG industry for more than three years, the decision was demoralizing.

“It’s insane,” she told Grist. “I’m sad, I’m frustrated. I feel like I’m fighting against a state that I love and that I’m trying to protect.”

The ruling does not prevent the Biden administration from pursuing a larger review of how it regulates LNG projects, one that could lead to more sweeping restrictions on the industry. However, given that this review would require the department to push through a new definition of whether exports are in the “public interest” under the decades-old Natural Gas Act, it is likely to be subject to legal challenges now that the Supreme Court struck down the so-called Chevron deference precedent which gave federal agencies the flexibility to craft such policies according to their interpretations of federal law.

Even so, in the wake of the ruling, environmental and climate advocates urged the administration to proceed with that larger shift.

“It’s no surprise that a Trump judge would bend the law to give the oil industry a win,” Craig Segall, the vice president of the climate-oriented political group Evergreen Action, said in a statement. “Fortunately, today’s deeply misguided decision from the Western District of Louisiana should have no impact on the Department of Energy’s statutory authority over what should be included in a public interest determination.”

But that long-term review of LNG exports will only continue if Biden wins re-election, and it’s unclear whether the attempted pause helped or hurt his election chances. in gas-rich states like Pennsylvania — a must-win state for the president — said that hurt his standing locally.

It also may have damaged Biden’s fragile and largely unspoken truce with major oil and gas companies, which supported carbon capture and hydrogen provisions in the landmark inflation-reduction law the president signed in 2022. During a March dinner at the Mar-a-Lago resort, former President Trump asked a group of oil and gas executives to donate about $1 billion to his campaign in exchange for favorable policies, including an end to natural gas -output pause.

“The damage has been done, in my opinion,” said Mary Landrieu, a former Democratic senator from Louisiana who now helps lead a coalition of gas industry stakeholders. “The decision was taken so suddenly and so poorly that it does not give people confidence that the president has a consistent and well-thought-out policy on the energy transition. I don’t think there was any upside to it, and I believe the downside really damaged the trusting relationship that was building. [with the oil industry] to a certain extent.”

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