State Attorneys General Challenge Biden’s Natural Gas Moratorium: A Legal and Economic Analysis

Introduction

The Biden administration’s recent moratorium on liquefied natural gas (LNG) export projects has sparked controversy and legal challenges from a coalition of 22 Republican state attorneys general. The attorneys general, led by Kansas Attorney General Kris Kobach, argue that the moratorium is unlawful, harmful to the economy, and detrimental to national security. This article provides a legal and economic analysis of the moratorium and the attorneys general’s challenge.

Legal Analysis

The Biden administration’s moratorium on LNG export projects raises several legal concerns. The Department of Energy (DOE) justifies the moratorium by pointing to a climate-focused executive order issued by President Biden. However, the attorneys general argue that DOE lacks the authority to pause LNG exports under the Natural Gas Act.

The Natural Gas Act requires the DOE to approve applications to export LNG to non-Free Trade Agreement countries unless such exportation is not “consistent with the public interest.” The attorneys general argue that DOE’s moratorium amounts to an unreasonable delay and conflicts with Congress’s express purpose in enacting the statute. They also argue that the moratorium may give rise to liability under the Administrative Procedure Act for unreasonable delay.

Furthermore, LNG export terminals must already go through an environmental review when they are approved by the independent Federal Energy Regulatory Commission (FERC). LNG export projects must first survive FERC’s lengthy approval process before they are even ripe for DOE approval. The attorneys general argue that DOE’s moratorium fails to stay within the bounds of reasoned decision-making as required by federal statute and never opened the decision up for a public comment period before implementing it, another potential statutory violation.

Economic Analysis

The attorneys general argue that the moratorium on LNG exports is harmful to the economy and detrimental to national security. In December 2023, more than 87% of U.S. LNG exports went to Europe, U.K. or Asian markets. In the aftermath of Russia’s 2022 invasion of Ukraine, energy experts argued that LNG exports would be critical for helping American allies to wean off Russian gas. The industry has cited research indicating that LNG exports could add as much as $73 billion to the U.S. economy by 2040, create 453,000 American jobs and increase U.S. purchasing power by $30 billion.

The moratorium on LNG exports also weakens national security and emboldens Russia and other adversaries who are large producers of natural gas. The attorneys general argue that the moratorium harms the national security and will cost lives. They urge the administration to stop making decisions based on the whims of social media influencers and treat this matter seriously by reversing this reckless decision.

Conclusion

The Biden administration’s moratorium on LNG export projects has sparked controversy and legal challenges from a coalition of 22 Republican state attorneys general. The attorneys general argue that the moratorium is unlawful, harmful to the economy, and detrimental to national security. This article provides a legal and economic analysis of the moratorium and the attorneys general’s challenge. The moratorium harms the national security and will cost lives. The administration should reverse this reckless decision and treat this matter seriously.