The Department of Energy’s Impact Analysis on Proposed Liquefied Natural Gas Projects

The Department of Energy (DOE) has recently taken a significant step in the energy sector by ordering additional climate impact analyses for 17 large natural gas projects. This move comes after activists called on the administration to nix the projects due to their potential climate impacts. The DOE has never before rejected a gas export application on climate grounds, and this decision has sparked controversy and uncertainty within the industry.

The White House’s intervention in the permitting process for these projects has been described as a moratorium on the entire U.S. LNG industry by energy developer Venture Global. Such an action would have significant implications for the global energy market, potentially sending a devastating signal to U.S. allies that they can no longer rely on the United States for their energy security.

One of the projects that would be impacted by the DOE’s review is the Calcasieu Pass 2 (CP2) project, a proposed $10 billion LNG terminal located in Cameron Parish, Louisiana. This 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%.

Republican lawmakers and fossil fuel industry associations have called for the Biden administration to expeditiously approve pending LNG export terminals, arguing they are key for strengthening the U.S. economy and supporting the energy security of allies in Europe and Asia amid geopolitical turmoil. Sen. John Kennedy, R-La., the ranking member of the Senate Appropriations Subcommittee on Energy and Water Development, stated that the longer the Biden administration drags its feet on approving new paths for America to develop and supply its allies with clean natural gas, the more it empowers enemies like China and Russia and the more American people pay higher energy prices.

Sen. Bill Cassidy argued during a Senate Energy and Natural Resources Committee hearing this month that LNG export facilities in the U.S. would have an “overwhelmingly” lower carbon footprint than the alternative of coal-fired power generation in foreign nations. He also emphasized that these facilities are essential for displacing dirtier Russian gas that Europe remains reliant on.

International energy organizations Eurogas and the Asia Natural Gas & Energy Association (ANGEA) have issued strong statements of support for continued permitting of U.S. LNG export terminals. Eurogas stated that such exports are critical for ensuring the full phase down of Europe’s dependence on Russian natural gas, while ANGEA added that U.S. LNG is needed to meet Asia’s decarbonization goals.

However, LNG export terminals have been opposed by Democrats and environmentalists who argue they would create harmful pollution and contribute to global warming. Activists have posted videos on social media, generating tens of millions of views, and dozens of environmental groups have written to DOE Secretary Jennifer Granholm, imploring her to reject the CP2 project. Climate activist Bill McKibben is organizing a civil disobedience protest outside the Department of Energy’s headquarters in Washington, D.C., over the permitting of new LNG export terminals.

The Sierra Club Executive Director, Ben Jealous, stated that putting a stop to expanded gas exports is one of the most important moves President Biden could make on addressing the climate crisis. He also emphasized that these facilities pollute communities and make energy more expensive for American families.

In conclusion, the Department of Energy’s decision to order additional climate impact analyses for 17 large natural gas projects has sparked controversy and uncertainty within the industry. This move could have significant implications for the global energy market and the energy security of U.S. allies. The longer the Biden administration drags its feet on approving new paths for America to develop and supply its allies with clean natural gas, the more it empowers enemies like China and Russia and the more American people pay higher energy prices. It is essential for the Biden administration to consider the overwhelmingly lower carbon footprint of LNG export facilities and the critical role they play in displacing dirtier Russian gas that Europe remains reliant on.