UPDATE: Biden Administration ‘pauses’ LNG facility approvals
26 January 2024
Cites ‘climate crisis’ as a driving force
Baker Hughes CEO and Chairman Lorenzo Simonelli said he was “disappointed” that the Biden Administration said it was pausing approvals on pending applications for export of liquefied natural gas (LNG).
The length of the pause is undetermined; officials said it would likely last several months.
The U.S. is the world’s top LNG exporter. The pause in approvals affects facilities that do not yet have a permit from the DOE, including Venture Global LNG’s CP2 export terminal planned for Louisiana. That facility would have a liquefaction capacity of 20 MTPA of LNG.
In a comment on LinkedIn, Simonelli said Baker Hughes “strongly oppose” the move.
“We are disappointed with today’s announcement by the Administration to disrupt the growth of U.S. liquefied natural gas (LNG) – which has been one of the most transformative energy success stories of this century,” Simonelli’s statement said.
“The environmental benefits and efficiency of natural gas are clear and compelling. LNG enables a truly global market in natural gas, serving as a pillar of economic prosperity and national security for the U.S. and the world. LNG supplies remain fundamentally tight, and prices in Europe and Asia remain well above 10-year averages. Demand will continue to grow, and new LNG supply will come from somewhere. Policies that create rather than alleviate uncertainty for long-lead, strategic energy projects are counter-productive for the U.S., its global partners, and ultimately for energy development of all kinds.
“We strongly oppose this moratorium and call on the Administration to approve pending export applications with no further delays.”
“My Administration is announcing today a temporary pause on pending decisions of Liquefied Natural Gas exports – with the exception of unanticipated and immediate national security emergencies,” President Biden said in a news release. “During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment. This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.
As the natural gas sector has transformed over the past decade, DOE said it must use the most complete, updated, and robust analysis possible on market, economic, national security, environmental considerations, including current authorized exports compared to domestic supply, energy security, greenhouse gas emissions including carbon dioxide and methane, and other factors, the DOE said in a news release.
The American Petroleum Institute (API) and other industry groups expressed frustration with the announced pause.
“There is no review needed to understand the clear benefits of U.S. LNG for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels,” said API President and CEO Mike Sommers in a news release. “This is nothing more than a broken promise to U.S. allies, and it’s time for the administration to stop playing politics with global energy security.”
American LNG export capacity has tripled since 2018, and is slated to double further by 2030 even with the pause, Energy Secretary Jennifer Granholm told reporters.