Biden Toys With an LNG Export Permitting Ban
How to hurt allies and the U.S. economy to please the climate-change lobby.
Energy prices have retreated since Vladimir Putin’s invasion of Ukraine, but America’s enemies haven’t. So it’s hard to believe the Biden Administration is considering an election-year gift to Russia and Iran: An embargo on permitting new liquefied natural gas (LNG) export projects.
Our sources say Biden adviser John Podesta is pushing the idea in the White House as a sop to the climate lobby, which is still furious over the Administration’s approval of
ConocoPhillips
’ Willow oil project in Alaska. “We can help Gulf Coast residents stop the onslaught of LNG export terminals,” chief climate lobbyist Bill McKibben tweeted last week.
What about stopping Russia’s onslaught of Ukraine? U.S. LNG exports have increased by about 31 billion cubic feet per month (8.7%) since January 2022, which has helped Europe wean itself off Russian energy and reduced global gas prices. If not for U.S. LNG, political support in Europe for Ukraine might have flagged as its citizens shivered.
The growth in LNG exports owes largely to projects approved by the Trump Administration. The Energy Department must approve LNG exports to countries that don’t have free-trade agreements with the U.S. The Biden DOE has approved five permits, all of which have been capacity expansions. The Trump Administration approved 14 permits.
The Trump Administration approved permits in seven weeks on average, but the Biden team is taking 11 months to process them. Permits for four LNG projects capable of satisfying the annual natural-gas demand of India are awaiting approval, and one has been sitting at DOE for more than a year.
Even if these projects are approved, it will take a few years before they are up and running. But the eventual increase in LNG exports would help displace coal power and Russian gas. Russian LNG exports—some of which are still going to Europe—hit a record in December.
A new major Russian LNG export facility is scheduled to come online this year. Iran, the world’s third largest natural-gas producer, has revived construction on an LNG export facility that it aims to complete next year. The U.S. surpassed Qatar last year as the world’s top LNG exporter, but new projects could help Doha regain its lead.
If new U.S. LNG projects are blocked, Europe and Asia will have to import gas from elsewhere to meet their growing demand. Most won’t come from America’s friends. Yet the climate lobby says new LNG projects will lock in higher CO2 emissions for decades. They’re apparently less worried by the 305 coal-fired power plants that China has announced or has in the works.
News flash: China’s CO2 emissions increased last year by twice as much as U.S. emissions declined. Blocking new LNG export projects won’t reduce global emissions. But it would be a gift to America’s adversaries and show Europe that the U.S. isn’t a reliable ally.
“In Europe many projects for new LNG import terminals are based on the assumption of stable long-term supply relationships with the US,” Eurogas President Didier Holleaux said in a statement. “If additional US LNG export capacities would not materialise it would risk increasing and prolonging the global supply imbalance” and make prices volatile.
The problem with futile political gestures is they can have significant costs in the real world.
wsj.com |
