Right, Left, Labor, Business Agree: Biden’s LNG Freeze is Bad for America

  • February 5, 2024
  • News

The Biden Administration recently announced a temporary pause on the Department of Energy approving new U.S. LNG export projects that the United States does not have a Free Trade Agreement with – an announcement that received immediate criticism from elected leaders, foreign officials, industry leaders, and energy policy experts alike. These officials universally argued that the pause could hurt the U.S. economy, eliminate American jobs,  impede efforts to reduce emissions, and increase Europe and Asia’s dependence on Russia, the Middle East, and China for energy.

EID has discussed this issue extensively since the Biden administration’s announcement, including the initial response to the pause and the widespread bipartisan criticism from across the globe, including in energy producing states like the Appalachian Basin, Colorado, and Texas, to U.S. allies from around the world.

The number of leading bipartisan voices calling out the LNG pause continues to grow, calling the announcement – which several media outlets have reported will likely last until after the November presidential election –  out for what it clearly is: a purely political move to appeal to environmental activists who have zeroed in on American LNG as the next target, at the expense of American jobs and security.

Foreign Leaders and Officials:

On March 25, 2022, in a Joint Statement between the United States and the European Commission on European Energy Security, the United States made commitments to support the energy security of our allies. They made these commitments in light of the geopolitical instability in Europe following Russia’s attack on Ukraine:

“The United States commits to maintaining an enabling regulatory environment with procedures to review and expeditiously act upon applications to permit any additional export LNG capacities that would be needed to meet this emergency energy security objective and support the RePowerEU goals, affirming the joint resolve to terminate EU dependence on Russian fossil fuels by 2027.”

As the American Petroleum Institute (API) has highlighted, the Biden administration and top leaders have praised U.S. LNG for years.

U.S. LNG has played a crucial role in enabling the world to transition off their dependence on Russian energy. Many nations that are leading voices against Russia’s war in Ukraine have projects currently delayed by the Biden administration’s decision, including Japan, along with U.S. allies in Europe and across the globe.

One ally most likely to be economically damaged by the Biden administration’s announcement is Japan, who currently has a pending export application at the DOE for the Venture Global CP2 LNG project. Ken Saito, Japan’s Minister of Economy, Trade, and Industry, said the following just 4 days after Biden’s announcement:

“Some Japanese companies have already concluded offtake contracts for LNG that is scheduled to receive approval and begin production in the U.S. Therefore, we are concerned that the temporary suspension of export permits will delay the start of new LNG production from the US. We would like to carefully examine the medium to long-term impact of the issue and take necessary steps to ensure that Japan’s stable energy supply is not compromised.”

Government leaders in France have also voiced their support of gas exports from the United States. Olivier Becht, France’s Minister Delegate to Foreign Trade, highlighted the importance of American gas to security at a time of heavy geopolitical instability.

“What’s certain is that in the current geopolitical environment, we’re counting a lot on American gas.”

U.S. Elected Officials:

Biden’s decision has also received bipartisan criticism within the United States. While foreign voices focused on concerns with energy security and empowering Russia, U.S. representatives have centered their criticism around the damage the Biden administration’s pause might do to the economy and jobs of their respective states.

One of the more notable critics of the decision was Pennsylvania Senator John Fetterman (D) — who once supported a fracking ban. His vocal opposition to the moratorium is a clear indication of the importance of LNG to the country’s second largest-natural-gas producing state. Sen. Fetterman emphasized the need for President Biden to “rethink that, or remind them just of why this is so important… to make a different decision… We have to be developing more renewable energy, but we also have to rely [on], and make very clear that, natural gas is very much a critical part of our nation’s energy stack.” Sen. Fetterman and fellow Pennsylvania Senator Bob Casey (D) laid out Pennsylvania’s concerns with the moratorium in a joint statement to the Washington Examiner:

“While the immediate impacts on Pennsylvania remain to be seen. We have concerns about the long-term impacts that this pause will have on thousands of jobs in Pennsylvania’s natural gas industry. If this decision puts Pennsylvania energy jobs at risk, we will push the Biden Administration to reverse this decision.”

But criticism from Democrats was not limited to Pennsylvania; both West Virginia Senators have publicly criticized the pause. Senator Joe Manchin (D) immediately announced he would be holding a hearing (scheduled for Thursday) examining the impacts of the ban and demanding “evidence” of the alleged climate impacts. Sen. Manchin voiced his strong opposition to Biden’s LNG pause in a press release on the same day of the announcement:

“If this pause is just another political ploy to pander to keep-it-in-the-ground climate activists at the expense of American workers, businesses and our allies in need, I will do everything in my power to end this pause immediately.”

Fellow West Virginia Senator Shelley More Capito (R) also pointed to the political motives behind Biden’s announcement and argued that the move would strengthen our foreign adversaries.

“It seems to be a universal thought that this is a hat-tip to his young environmental community that he fears he is losing in this election… So, purely political reasons.”

“We’re just going to keep pounding the president on this, because honestly, it’s an economic blow of large proportions. And also just a geopolitical mistake, in terms of the international security.”

Another important member of Democratic leadership that voiced caution around Biden’s decision was Maryland Senator Ben Cardin (D), Chair of the Senate Foreign Relations Committee:

“I do think we have to recognize that there are friendly countries that need better sources of energy. I think the analysis will show that there is a role for us on LNG going forward.”

U.S. Senator John Hickenlooper (D-CO), who sits on the U.S. Senate Energy and Natural Resources Committee, said in comments to Politico that the Biden administration should ensure that the decision does not create “needless levels of red tape” for future LNG exports. Hickenlooper has also emphasized the environmental benefits of LNG. He said in a Colorado Sun event in October:

“A lot of people disagree with [drilling extra wells in America, but at the same time when you replace coal with (natural gas) the reduction in carbon emissions is so drastic that it’s worth drilling those extra wells.”

Bipartisan criticism came from the House of Representatives in Colorado as well, Reps. Yadira Caraveo (D) and Doug Lamborn (R) wrote a letter to President Biden focusing on their concerns that:

“A pause on new LNG export approvals could have a devastating impact both on Colorado’s economy and our international partners.”

Other Democratic opposition came from Senator Chris Coons (D-DE), a member of the Senate Foreign Relations Committee, who warned the administration of the need to balance environmental impacts against showing commitment to our allies’ security. Sen. Coons warned that “we should be careful about this,” saying the following to Politico:

“[Climate considerations should be] balanced with critical national security interests in terms of ensuring our vital allies and partners in Europe in the middle of Russia’s ongoing aggression are not abruptly cut off from gas supplies.”

Former Louisiana Senator Mary Landrieu, who was heavily critical of the decision in an interview with CNBC on the day of the announcement, highlighted that LNG is cleaner than coal and said President Biden was “breaking his promise to our democratic allies”:

“This is surprising. It’s disappointing. It’s alarming. It’s completely contrary to the President’s own climate goals. When you stop exporting cleaner natural gas from the United States, you only encourage countries all over the world to use more coal. He’s breaking his promise to our democratic allies. At a time when he’s asking Republicans in Congress to support money to the Ukraine, he’s pulling the rug out from under Ukraine. It doesn’t make any sense…this doesn’t make sense from his environmental agenda. Natural gas is part of the solution, not the problem. Natural gas is cleaner than coal…and President Biden knows this. So I don’t know who President Biden thinks he’s helping or enticing to support him. This is contrary to his climate goals.”

Other criticism from Biden’s own side of the aisle came from former Ohio Democratic Representative Tim Ryan who argued in a post on X that the pause was “a major policy and political issue that the Democrats have just put themselves squarely on the wrong side.”

Another member of the House from Ohio who published criticism of Biden’s decision was Representative Bob Latta (R-OH-5), who said:

“The Biden administration’s action today sends a clear message that they would rather appease radical environmental activists over securing U.S. energy independence and providing allied nations with cleaner fuel. This is a gift to Putin and Russia; I urge the Biden administration to reverse this decision immediately.”

House Speaker Mike Johnson (R-LA) spoke harshly in opposition to what he saw as a “subversive” move by Biden to pause LNG export permit applications:

“The announcement by President Biden is as outrageous as it is subversive. Stalling LNG export terminals, like Calcasieu Pass 2 in Louisiana, not only prevents America’s economic growth, it empowers our adversaries like Vladimir Putin.”

“Since Russia’s invasion of Ukraine began, American petroleum producers have increased LNG shipments to our partners in Europe to prevent a catastrophic, continent-wide energy crisis and to provide an alternative to Russian energy exports.”

Other leading U.S. Representatives on the Republican side of the aisle opposed to Biden’s decision were House Energy and Commerce Chair Cathy McMorris Rodgers (R-WA-5) and Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC-3). In a press release on the House Energy and Commerce website announcing the subcommittee’s hearing entitled “Politics Over People: How Biden’s LNG Export Ban Threatens America’s Energy and Economic Security”, the two chairs said the following:

“The Biden administration’s indefinite ‘pause’ on LNG exports jeopardizes American energy, security, jobs, and the economy. This latest attack on energy production is a political decision to appease radical climate activists at the expense of our energy security and the security of our allies. If President Biden were serious about environmental stewardship, he would unleash the production and export of clean, affordable, and reliable American natural gas – which has allowed us to reduce emissions more than any other nation.” Said Rogers and Duncan. “This hearing will be an opportunity to explore the many benefits of American LNG not only for the U.S., but for our allies as well.”

Adding on to the criticism from leadership of the House Energy and Commerce committee was Arkansas Representative Bruce Westerman (R), Chair of the House Natural Resources Committee. Westerman said the policy “is shortsighted political pandering and will do nothing but drive the cost of energy even higher.”

On the other side of Congress, Senate Republicans have universally criticized the move. Sens. Ted Cruz (R-Tex.) and Bill Cassidy (R – La.) led 25 Republican colleagues in a letter opposing pause on export permit applications. Sen. Cruz said in a press release for the letter:

“This announcement is another blatant attack in the Biden administration’s day 1 campaign against America’s oil and gas industry and the American workers who sustain it. The Biden administration has always been controlled by the fringes of the Democrat Party, including radical climate activists, and that control is only deepening as the 2024 election approaches. This move is environmentally damaging, because U.S. liquefied natural gas (LNG) displaces dirtier foreign options, and is geopolitically reckless, because it is guaranteed to undermine European energy security and increase dependence on Russia.”

Sen. Cassidy called the pause “a war on our allies” and pointed out that “they depend on us for their energy and economic security. For apparently political purposes, the Biden administration is deliberately postponing permitting. Putin must have designed this strategy.”

Fellow Louisiana Senator John Kennedy (R) has also been one of the harshest critics of Biden’s announced LNG export pause and has taken action to try to reverse the decision. In an op ed to the Wall Street Journal, Sen. Kennedy wrote discussed the Calcasieu Pass 2 export terminal in his home state of Louisiana, pointing out that “nixing its permit alone would jeopardize $20 billion in investments for American industry and kill thousands of good Louisiana jobs.” He continued:

“The White House claims this is necessary because the Energy Department based its permit reviews on five-year-old data. That’s their story. Here’s the truth: Climate warriors want President Biden to destroy America’s fossil-fuel industry, but he doesn’t want to pull the trigger himself. By withholding permits, the president can scare away investors, bleed these projects of capital and claim to have clean hands if the terminals close.“

“There is no environmental justification for killing these jobs, either. Natural gas is the reason America leads the world in carbon-emission reductions. From 2005-19, natural gas drove a 32% reduction in American carbon emissions while creating 1.4 million manufacturing jobs and ensuring that families paid half as much to heat their homes.”

More recently, today more than 150 House Republicans called for President Biden to reverse his moratorium on LNG export projects in a letter calling on his administration to “expeditiously approve all pending applications to increase the global supply of natural gas”:

“Under both Democratic and Republican administrations, DOE has consistently found that U.S. LNG exports serve the ‘public interest’ because they contribute positive economic benefits and strengthen energy security for the American people, and also have the potential to reduce global greenhouse gas emissions… Actions that slow or halt the ability to export U.S. LNG would weaken global energy security and put these strategic markets at risk.”

Former Defense Secretary Leon Panetta told the House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party in a Jan 30th hearing:

“It is very important to be able to provide that kind of fuel … to our allies. Because they’ve joined with the United States, they have lost the ability to have to rely on Russian energy – that’s a good thing…The United States is the swing producer for energy in the world, if we permit it to be so.”

Representatives, local officials, and leading voices from Texas have voiced strong opposition to the moratorium as well. Texas has at least two LNG projects, Port Arthur LNG and Corpus Christi Liquefaction LNG, currently impacted by Biden’s pause. Commissioner Dawn Buckingham of Texas General Land Office and former U.S. Energy Secretary and Texas Governor Rick Perry have publicly criticized the decision. Commissioner Buckingham spoke to the economic damage President Biden’s decision would do, saying:

“It’s unconscionable that our own federal government would take such drastic steps with the goal of shutting down this thriving industry. Biden’s ban on LNG will do nothing more than put our economy, job availability, and national security at risk.”

Sec. Perry also highlighted the vulnerability that a pause on LNG exports creates to security across the globe, and addressed the crucial role LNG plays in reducing emissions and supporting the American economy.

“Unfortunately, the Biden administration refuses to acknowledge the importance of strong energy production to U.S. national security and is playing into our adversaries’ hands by prioritizing appeasement of environmentalist groups – even those backed by China – over the long-term strength and security of our nation. It’s imperative to reverse these actions and return to the path of energy independence. Our focus must shift towards domestic oil and gas production, characterized by the world’s strictest environmental standards, to bolster energy security, support the American workforce, and stimulate economic growth.”

International Organizations and Industry:

The criticism of the Biden administration’s decision to pause new LNG exports also raised strong concerns from leading international organizations.

This includes a joint letter addressed to President Biden on the day of his announcement from the U.S. Chamber of Commerce, Business Europe, and Keidanren (Japan Business Federation) expressing their concerns with the pause:

“We urge you to reconsider this decision in light of the unique and vital role of American natural gas in meeting the critical energy security and Paris Agreement objectives that our nations share. … In the aftermath of Russia’s unwarranted invasion of Ukraine, these crucial supplies helped the people of Europe and Japan heat and power their homes, factories, and businesses at a time of great need and uncertainty. … Ensuring the world’s leading democracies have access to stable and secure supplies of energy is a geopolitical and economic imperative, while cleaner natural gas provides the environmental opportunity to continue progress on emissions reductions.”

Similarly, Menelaos Ydreos, Secretary General of the International Gas Union (IGU) called the move “highly worrying,” explaining:

“The current dynamic… is eroding these fundamental market principles and will harm global energy security and emission reduction. Restoring global LNG supply balance and energy security requires the current and forecasted shortfall to be addressed…current levels of investment and off-take agreements are still falling short of the growing global demand.”

BusinessEurope, the continent’s largest business group, told the New York Times that restrictions on gas exports from the United States would be “a huge concern.”

François-Régis Mouton, Managing Director of IOGP Europe, criticized Biden’s decision in a press release:

“The data is clear – without a steady increase in US LNG supplies, Europe will be unable to substitute Russian gas imports in coming years. There simply aren’t enough LNG alternatives out there. If this measure is extended or made permanent, Europe may well see the return to higher energy costs, a second wave of industrial demand destruction, and an increase in coal-fired power generation and associated emissions.”

Didier Holleaux, President of trade association EuroGas, said the following about the importance of imported American LNG:

“This LNG has been a relief for Europe and contributed to the stabilization of gas and electricity prices in Europe for consumers, after a long period of record high prices caused by the Russian supply drop…A lack of additional U.S. gas-export capacity would risk increasing and prolonging the global supply imbalance.”

Leading up to the Biden administration’s “pause” on new LNG export approvals, German and Japanese companies also sent letters to the U.S. Federal Energy Regulatory Commission urging the agency to provide the necessary approvals for the CP2 LNG project. The German state-owned company, Securing Energy for Europe (SEFE), laid out the need for the project’s approval, emphasizing:

“SEFE’s long-term LNG purchased from CP2 LNG will now be vital to Germany’s energy security in the new environment where gas pipeline supplies from Russia have stopped.”

Energy and National Security Policy Experts:

Experts and leading voices of energy policy have voiced their criticisms as well. Ben Cahill, Senior Fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS), gave an in-depth explanation of the extent to which American LNG helps to provide clean energy to Russia’s adversaries across the globe:

“Without growing volumes and flexible supplies from the United States, it would have been much more challenging to accommodate these shocks, and there would have been a massive price discrepancy in the Atlantic and Pacific basins. The United States now plays a critical balancing role in the global LNG market, adding supply and flexibility that has boosted global energy security.”

Daniel Yergin, Vice Chairman of S&P Global and an oil industry historian, emphasized that “no one hates U.S. LNG more than Vladimir Putin.”

Javier Blas, a Bloomberg opinion columnist covering energy and commodities, said in a post on X the move was “a huge win for climate activists is so, so, so short sighted – it’s a win for coal miners (and for Qatar).”

Progressive Policy Institute (PPI) Director of Energy and Climate Elan Sykes explained the multifaceted negative impact the moratorium will have on the United States and our allies:

“An honest approach to evaluating the climate and geopolitical impacts of LNG facilities would take into account the climate costs of mining more coal, burning more coal and using coal as a chemical feedstock. A fair test would acknowledge air pollution differences and coal mine methane leaks that exceed natural gas methane emissions by likely underestimated official measurements. It would account for the boon to Putin if U.S. LNG shipments to Europe and Asia declined, sending those markets back into the fold of the Russian petrostate.”

U.S. Business and Industry:

Domestic industry leaders also had swift responses to the decision.

On Jan 31, the Independent Petroleum Association of America (IPAA) joined the Energy and Workforce Technology Council (EWTC), U.S. Oil and Gas Association (USOGA), National Ocean Industries Association (NOIA), Texas Alliance of Energy Producers, and Gulf Energy Alliance in a letter to House and Senate leaders supporting U.S. Congressman August Pfluger’s (R-TX-11).  “Unlocking Our Domestic LNG Act.” The letter said the following:

“Removing DOE from the process will help to ensure that political maneuvers will not interfere with energy supplies. It is vital that Congress send an immediate message to our allies, and enemies, abroad that U.S LNG will continue to flow uninterrupted for many years to come.”

This letter follows an industry letter from IPAA and API, among many others, warning of the dangers of an LNG export pause two days before Biden’s announcement:

“Any action to halt U.S. LNG export approvals would be a major mistake that puts American jobs and allies at risk while undermining global climate goals. The United States is the world leader in natural gas production, meeting record domestic demand and becoming the top exporter of LNG in 2023. Our nation’s abundant supply of natural gas is an impactful geopolitical tool, helping insulate American consumers from increasing global instability while advancing American national interests and ensuring the energy security of key U.S. allies.”

(Read more of API’s coverage here, including a pushback against the activists pushing for this halt.)

Karen Harbart, President and CEO of the American Gas Association (AGA) also released a statement highlighting the damage that delaying LNG export projects will do to the future global energy supply:

“Shortages of American natural gas on the global market will result in higher energy costs for America’s allies, energy shortages in the developing world and dramatically higher profits for American adversaries like Russia. The United States should not undercut our allies or fund our enemies with a policy that will increase global emissions and hamstring an engine of economic growth.”

In an interview with CNBC, President of Western Energy Alliance Kathleen Sgamma spoke to the negative impacts on national security Biden’s pause could have:

“The notion that we need to stop exports to study them is simply not a regulatory requirement. That’s tap dancing for a bad policy. Our allies, particularly in Europe, will pay the price for the Department of Energy’s politically motivated decision. As Germany has proven, if our allies don’t have access to U.S. natural gas then they’ll need to burn more coal to keep the power going.”

State trade associations, like the Gas and Oil Association of West Virginia (GO-WV) have also been vocal against Biden’s effort to cancel future LNG export projects. In response to the announcement, GO-WV Executive Director Charlie Burd said in a press release:

“Widely recognized as the most strategic and effective way to reduce greenhouse gas emissions globally. LNG is an essential resource that supports America’s fundamental goals of improving the environment, increasing energy access, and supporting job and economic growth here at home.”

Toby Rice, CEO of EQT Corporation, the nation’s largest natural gas producer, said in a letter to Secretary Granholm:

“Blocking the export of climate solutions is an especially dangerous precipice, even before factoring in the obvious geopolitical ramifications. The countries that were going to purchase U.S. LNG have their own Nationally Determined Contributions in line with the Paris Accord, and as such are required to consider the climate impacts of the imported LNG in their overall analyses. Presumably they determined that, like virtually all countries that have made meaningful climate progress, natural gas is actually a necessary good for them, and not an unnecessary evil as those behind the Moratorium would have us believe.”

Media Outlets:

The media has also rejected the administration’s announcement. In an editorial, the Wall Street Journal highlighted the “harm” this “raw political payoff to the climate left will do to U.S. national security and economic interests.”

The Journal also highlighted how the move could threaten more than just pending permits:

“The White House says the pause will only affect a handful of projects that are currently seeking Energy Department permits, but this is dishonest. It will also freeze about a half a dozen projects seeking Federal Energy Regulatory Commission approvals and could halt another dozen or so that have been permitted by previous Presidents…

The Administration is deliberately creating uncertainty about permit approvals and extensions to chill investment and discourage foreign governments from signing long-term contracts. Why risk investing in or signing a purchase agreement with a Gulf Coast project that may later be killed? Smarter to link up with the Qataris.”

Similarly, the Washington Post called the move a “win for political symbolism, not the climate”:

“It’s an election-year sop to climate activists that will do much more to unsettle vital U.S. alliances than to save the planet.”

And, taking aim at the alleged research that is fueling the climate battle against LNG, Politico’s ClimateWire rightly called the research an outlier:

“The argument that LNG is dirtier than coal runs against previous academic and government studies, which have found that LNG can reduce planet warming emissions.”

The article goes on to explain that it isn’t the first-time activist researcher Robert Howarth has “courted controversy” – something that EID has discussed numerous times.

Bottom Line: Rebuke of the Biden administration’s LNG moratorium has been swift and wide-ranging: from U.S. allies to elected leaders, foreign officials to industry, media and labor – there is widespread consensus that restricting U.S. LNG runs counter to U.S. interests, counter to geopolitical goals, and counter to the Biden administration’s own climate goals.

 

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