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us-lng-export-approval-pause-sends-devastating-signal
Source: Shutterstock
us-lng-export-approval-pause-sends-devastating-signal
Source: Shutterstock

US LNG export approval pause sends ‘devastating signal’

US President Joe Biden has paused pending decisions of liquefied natural gas (LNG) exports in a move seen as ‘devastating’ for international relations and putting a moratorium on the entire industry.

Amid mounting pressure to act following COP28 – and its commitment to ‘transition away’ from fossil fuels – the US President said, “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.”

The US, the world’s leading LNG exporter last year, is confident the decision will not impact LNG supplies to allies in the near term, and can lift the pause in the event of any unanticipated and immediate national security emergencies. Last year roughly half of its LNG exports were shipped to Europe.

A White House statement made little reference to the impact on industry, but referenced heavily on the devastating toll of climate change and impact on young people and frontline communities, who are using their voices “to demand action from those with the power to act”.

“And as America has always done, we will turn crisis into opportunity – creating clean energy jobs,” it added.

In a separate statement, the White House said current economic and environmental analyses the DOE uses to underpin its LNG export authorisations are “roughly five years old” and no longer adequately account for energy cost increases.

Alongside external pressures, the US is committed to an 80% clean energy target by 2030, and attracted around $200bn in private clean energy investments following the passing of the Inflation Reduction Act (IRA).

The friction between policymakers and industry over LNG is intensifying.

According to a LinkedIn statement from Venture Global LNG, which is developing the Calcasieu Pass LNG export facility in Louisiana and targeting 10Mtpa of LNG annually, the Biden-Harris administration “appears to be putting a moratorium on the entire US LNG industry”.

“Such an action would shock the global energy market, having the impact of an economic sanction, and send a devastating signal to our allies that they can no longer rely on the United States. The true irony is this policy would hurt the climate and lead to increased emissions as it would force the world to pivot to coal.”

Charlie Riedl, The Center for LNG Executive Director, described the move as “a short sighted and damaging action” and agreed it weakens US relations with its allies.

He said, “We are dismayed that the administration is backtracking on promises to our long-term allies, which hinge on additional LNG export capacity.”

Riedl also underlined the long-term multi-billion-dollar nature of LNG projects and their knock-on impact across the economy, such as increasing purchasing power, spurring gas production and encouraging domestic and jobs growth.

“In contrast, limiting US LNG exports will destabilise international energy markets, driving up costs, and compel trade partners and allies to sign long-term energy supply agreements with parties whose interests diverge from American interests.”

Dena Wiggins, President and CEO of The Natural Gas Supply Association, said it was an ill-advised action that destabilises energy markets and endangers future natural gas projects.

“This halt of authorisations undermines the ability of future natural gas projects to move forward. Natural gas has been instrumental to reducing America’s own emissions, while strengthening our energy independence and fuelling innovation. Our LNG exports are accelerating the adoption of more reliable, cleaner fuels in growing and developing economies around the world,” she said.

But Abigail Dillen, President of Earthjustice, applauded the administration for taking the important step to align its decision-making on gas exports with US climate goals.

She said as communities across the country face the devastating impacts of the climate crisis and fossil fuel pollution, it’s never been clearer that rubber-stamping LNG exports is not in the public interest.

“We look forward to working with the Department of Energy to make sure that the environmental and economic risks of LNG exports are fully accounted for when it makes public interest determinations,” she said. “The US is now the largest exporter of methane gas in the world, and new LNG infrastructure threatens to keep us locked into decades of fossil fuel use and climate-warming emissions.”

LNG, while an improvement on oil or coal, is primarily made of methane, a greenhouse gas deemed 80 times more potent than CO2 in the short term and 30 times worse in the long term.

Under the Oil and Gas Decarbonisation Charter at COP28, 50 companies accounting for 40% of global oil production committed to eliminating their methane emissions by 2050. The Global Methane Pledge launched at COP26, led by the US and the European Union, now has 111 country participants who together are responsible for 45% of global human-caused methane emissions.

Tensions are ramping up in the maritime industry too, where LNG is increasingly seen as a vital fuel in its own decarbonisation transition.

The final quarter of 2023 saw the combined fleet and orderbook of large LNG ships (60,000+ cbm) pass the symbolic 1,000-vessel-milestone for the first time. More ‘LNG-ready’ ships are coming to market, such as the one recently unveiled by HMM (click here).

The White House decision came on the same day that Texas LNG, a proposed four million tonnes per annum liquefied natural gas (LNG) export terminal to be constructed in the Port of Brownsville, Texas, received relevant permits required for a final investment decision (click here).


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