Fossil Fuel Industry’s Strong Opposition to Biden’s Expected Actions on Natural Gas Projects

The fossil fuel industry, a significant player in the American energy sector, has expressed its concerns over the potential impacts of the Biden administration’s expected actions on key natural gas export facilities. In a letter to Energy Secretary Jennifer Granholm, more than 30 industry associations, including the American Petroleum Institute (API) and American Exploration and Production Council (AXPC), voiced their opposition to the administration’s plans to delay permitting for these projects due to their potential climate impacts.

The United States is the world leader in natural gas production, with abundant supplies meeting domestic demand and making it the top exporter of liquefied natural gas (LNG) in 2023. The nation’s natural gas exports are crucial for meeting energy demand in Europe and Asia, helping insulate American consumers from global instability and advancing American national interests.

The proposed delay in permitting for LNG export terminals would have significant consequences. It would bolster Russian influence, undercut President Biden’s commitment to supply allies with reliable energy, and threaten American jobs. The industry groups argue that this decision would be a major mistake, as it would undermine American credibility and harm the global climate progress.

In the wake of Russia’s invasion of Ukraine in early 2022, Biden traveled to Europe and struck a deal with the European Union, vowing to send more U.S. LNG to the bloc. This month, energy associations Eurogas and the Asia Natural Gas & Energy Association (ANGEA) issued statements of support for continued permitting of U.S. LNG export terminals. Eurogas reiterated that exports were critical for ensuring the full phase down of Europe’s dependence on Russian natural gas, while ANGEA added that U.S. LNG was needed to meet Asia’s decarbonization goals.

However, the Biden administration is reportedly planning to require the Department of Energy (DOE) to conduct a more rigorous environmental review process for 17 pending LNG export terminals. While the DOE still needs to sign off on the proposed projects’ permits, it was not previously required to analyze their contribution to climate change. The agency has never before rejected a gas export application on climate grounds.

API CEO Mike Sommers expressed his concerns, stating that this decision would be a win for Russia and a loss for American allies, U.S. jobs, and global climate progress. He argued that there was no need for a review to understand the 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.

Proponents of increased LNG exports argue that transitioning the world’s economy to more natural gas reliance would help ensure nations meet decarbonization goals. Without increased LNG, they argue, nations would rely more heavily on coal-fired power generation, which has a much larger carbon footprint when burned than natural gas power generation.

The industry letter to Granholm noted that the U.S. has led the world in carbon emissions reductions thanks in large part to greater reliance on natural gas. Coal produced the largest share of electricity generated in the U.S. for decades until 2015 when natural gas surpassed it.

A tank car transporting LNG is pictured in Germany. In a statement this month, industry group Eurogas said, “if additional U.S. LNG export capacities would not materialize, it would risk increasing and prolonging the global supply imbalance.”

Among the projects that would be impacted by the DOE’s review is the so-called Calcasieu Pass 2 (CP2) project, a proposed $10 billion LNG terminal located on a 546-acre site in Cameron Parish, Louisiana, which would be the largest export terminal of its kind in the nation. The facility would have a nameplate export capacity of 20 million metric tonnes per annum (MTPA) of LNG and a peak capacity of about 24 MTPA. In 2023, the U.S. exported 88.9 MT of LNG, meaning the CP2 facility would alone increase exports by a staggering 23%.

Shaylyn Hynes, a spokesperson for energy developer Venture Global, expressed her concerns, stating that the administration may be putting a moratorium on the entire U.S. LNG industry. She added that such an action would shock the global energy market, have the impact of an economic sanction, and send a devastating signal to allies that they can no longer rely on the United States. The true irony is that this policy would hurt the climate and lead to increased emissions as it would force the world to pivot to coal.

In conclusion, the fossil fuel industry’s opposition to Biden’s expected actions on natural gas projects is a significant concern. The potential delay in permitting for LNG export terminals would have far-reaching consequences, including bolstering Russian influence, undercutting American credibility, and threatening American jobs. The industry’s concerns are valid, and the administration should carefully consider the potential impacts of its actions on the energy sector and American allies.