API: Derailing US gas exports and LNG infrastructure build-out could undermine global energy security

Home Fossil Energy API: Derailing US gas exports and LNG infrastructure build-out could undermine global energy security

While the push to overhaul permitting rules has reached an impasse, things are heating up in the U.S. as the clash between fossil fuel supporters and their opponents, which want to see a faster revamp of the grid to ensure it will run on green and renewables energy, hits new highs. After the Biden administration hit the pause button on pending approvals of liquefied natural gas (LNG) exports, media speculation is running rampant over the decision’s ability to hinder the development of U.S. LNG infrastructure. Have things come to a head over climate concerns or is this media frenzy just part and parcel of the 2024 election run?

Illustration; Source: American Petroleum Institute (API)

While it is no secret that climate campaigners and environmental activists have upped their efforts to halt the further build-out of fossil fuel infrastructure, including LNG projects, the U.S. oil and gas industry is far from being in dire straits, especially after U.S. LNG exports reached monthly and annual record highs in December 2023. The energy market analysts are under the impression that this rise positioned the U.S. to become the largest exporter of LNG in 2023.

The Biden-Harris administration revealed a temporary pause on pending decisions on exports of LNG to non-FTA countries on Friday, January 26, 2024. This hiatus is expected to be in place until the Department of Energy can update the underlying economic and environmental analyses for authorizations, which are around five years old and considered to “no longer adequately account for considerations like potential energy cost increases for American consumers and manufacturers beyond current authorizations or the latest assessment of the impact of greenhouse gas emissions,” according to the White House.

“Today, we have an evolving understanding of the market need for LNG, the long-term supply of LNG, and the perilous impacts of methane on our planet. We also must adequately guard against risks to the health of our communities, especially frontline communities in the United States who disproportionately shoulder the burden of pollution from new export facilities. The pause, which is subject to exception for unanticipated and immediate national security emergencies, will provide the time to integrate these critical considerations,” elaborated the Biden-Harris administration.

While acknowledging not only that the U.S. is already the number one exporter of LNG worldwide but also that its exports are set to double by the end of 2030, the White House sought to reassure its allies of its unwavering support. To this end, the Biden administration emphasized that the temporary pause would not impact America’s ability to continue supplying LNG to its allies in the near term through existing LNG production and export infrastructure.

“As Republicans in Congress continue to deny the very existence of climate change while attempting to strip their constituents of the economic, environmental and health benefits of the President’s historic climate investments, the Biden-Harris administration will continue to lead the way in ambitious climate action while ensuring the American economy remains the envy of the world,” highlighted the White House.

In response to the LNG permit pause, which the oil and gas lobby sees as a disruption of the development of U.S. LNG infrastructure, the American Petroleum Institute (API) warned that such a move would undercut President Biden’s pledge to send roughly 5 billion cubic feet per day of LNG through 2030 to Europe to help end its dependence on Russian gas, as U.S. LNG is said to be “critical” for helping Europe replace Russian gas.

Mike Sommers, API’s President and CEO, commented: “This would be a win for Russia and a loss for American allies, U.S. jobs and global climate progress. 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. 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.” 

Furthermore, API points out that an analysis of President Biden’s pledge found that its economic impact on the American economy could be as high as 71,500 jobs per year, $63 billion in capital expenditures, and a GDP boost of $46 billion between 2025 and 2030. The U.S. sent more than 800 LNG cargoes to Europe in 2022, which represents a 141% increase from 2021. A recent study shows that Europe likely faces a looming natural gas supply gap that threatens its long-term energy security.

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