A Closer Look at Politics Behind Biden Administration's LNG Permitting Pause

Mark Green
Posted April 18, 2024

Here’s what U.S. Energy Secretary Jennifer Granholm said this week about the Biden administration’s pause on permitting for liquefied natural gas (LNG) exports during her appearance at a Senate Energy and Natural Resources Committee hearing:

• The LNG pause, announced by President Biden in January, to study U.S. LNG, is specifically focused on domestic natural gas prices, market demand and potential environmental effects.
• The analysis should be finished “around the end of the year.” (Before week’s end, however, Brad Crabtree, the Energy Department’s assistant secretary for the Office of Fossil Energy and Carbon Management, told a House panel that the review would be completed by the end of the first quarter of 2025.)
• Opponents of the pause risk over-dramatizing things. “It is a pause for a study, you don't need to hype it beyond what it is,” Granholm said. “It is a pause to get data.”

Yet, the “nothing to see here” defense from Granholm and other administration officials has two big problems:

1. Timing: Pausing LNG permitting in an election year (to conclude after Americans go to the polls) sure looks like a political strategy to shore up some parts of the president’s base of voter support.
2. Facts: Neither of the administration’s reasons for pausing LNG permitting – LNG’s potential effects on domestic natural gas prices and the environment – holds any water.

Politics looms large over the LNG pause. During the Senate hearing, Sen. Steve Daines of Montana said the administration is maneuvering toward a full-scale ban of new or existing LNG deliveries to our allies in the near future. “You are yielding to the radical elements of the left,” Daines said to Granholm. “It doesn't sound like a pause. It sounds like an ideology that wants to keep LNG from ever being shipped anytime.”

Studies show the facts don’t support what the administration is doing.

Natural gas prices among lowest in the world

Americans have enjoyed some of the lowest residential natural gas prices in the world – even as the U.S. began sending LNG to global allies, according to a new study.

The study found that over the past decade, average U.S. Henry Hub natural gas prices were 54% lower than in the preceding decade. Even as America reached a record level of LNG exports over the first six months of 2023, U.S. natural gas prices were at the “lowest six-month average in more than 35 years (outside the COVID-19 pandemic).”

Environment: LNG is Part of the Climate Solution

The increased use of natural gas is a leading reason U.S. power sector carbon dioxide (CO₂) emissions are near generational lows. Switching from coal to natural gas to fuel power generation is responsible for more than 60% of the CO₂ emissions from that sector since 2005. But instead of seeing these benefits as exportable to the world through deliveries of American LNG, the administration is hindering those benefits and could be encouraging increased use of coal.

Speaking of coal, another new study found that the life cycle greenhouse gas (GHG) emissions intensity of American LNG supplied to Europe and Asia was half that of coal.

The study by Berkeley Research Group for LNG Allies and the American Exploration and Production Council is an independent analysis of the GHG emissions of American LNG versus those of other available fuels, including piped natural gas and coal, in 13 destination markets in Europe and Asia. The destinations were chosen because they received more than 90% of U.S. LNG exports in 2022, the data year used. Emissions of the three fuels were analyzed from production/mining through their use to power electricity generation.

Charts from the Berkeley study:

Again, the GHG intensity of coal was twice as high as American LNG in Europe and Asia. While natural gas pipelined from Norway to Europe had lower GHG intensity than LNG shipped to Europe, the GHG intensity of natural gas piped from Russia – formerly Europe’s leading supplier – was about 41% higher than American LNG.

Meanwhile, the GHG intensity of coal shipped to Asia also was twice as high as American LNG to Asia. The GHG intensity of pipelined natural gas from Russia to Asia was about 30% higher than LNG, while the GHG intensity of natural gas pipelined from Turkmenistan was nearly 350% higher than American LNG sent to Asia.

Bottom line: We side with members of the Senate Energy and Natural Resources Committee who asked Secretary Granholm why the administration believes it is necessary to pause LNG permitting – sending negative signals to allies and global markets – for an election-year study when the administration’s reasons for the pause are not supported by the facts.

It’s a good question. The only explanation left is politics, which probably is not compelling for American voters, nearly 90% of whom said in a recent poll that the U.S. should continue supplying natural gas to allies – to help bolster the economy and strengthen America’s national security.

Meanwhile, America’s allies in Europe also are looking for answers. Thirty-five members of the European Parliament wrote to President Biden this week, urging an end to the LNG pause:

“This decision could have significant negative impacts on European energy security in the coming years and decades. … The decision not to allow permits to proceed undermines America’s allies, and the Western order more broadly, and will give succour to our adversaries and those who wish to divide us.”