The Biden administration last week announced that it was pausing the permitting process for some new natural gas export projects, including a facility that would be the second-largest gas export terminal in the United States. It’s a move the White House said will help the US meet its climate change goals, but it’s not clear how it will affect the economy, energy markets, or the environment.
It’s worth parsing this announcement carefully. The White House said on January 26 that it’s issuing a “temporary pause on pending decisions on exports of Liquefied Natural Gas (LNG) to non-FTA [free trade agreement] countries until the Department of Energy can update the underlying analyses for authorizations.”
That means the move won’t affect exports from the eight LNG export terminals already operating in the US, which exported an average of 11.6 billion cubic feet of LNG per day in 2023 — 1 billion more than the world’s second-largest exporter, Australia. It only applies to permit applications for new terminals looking to export to countries that do not have free trade agreements with the US, which includes most of Europe and Asia. There are currently four LNG export terminals under consideration with the Federal Energy Regulatory Commission. The White House notes that in spite of this pause, US LNG exports are still projected to double by 2030. And the pause is temporary, which means that if the proposed permits do eventually pass muster, gas exports from new terminals to non-free-trade-agreement countries could proceed anyway.
While permits for new liquefied natural gas export facilities are paused, exports from existing terminals will continue. Julia Naue/picture alliance via Getty ImagesThe Energy Department said it will use the delay to examine LNG export permit applications with newer data to ensure potential exports serve US interests, accounting for domestic energy needs, national security, and the environment. The process will take several months at least, Energy Secretary Jennifer Granholm said during a teleconference.
While the pause itself is narrow in scope, it’s part of a broader reckoning as the US’s newfound dominance in oil and gas production collides with ambitions to reduce its contributions to climate change. Biden’s decision to halt some new LNG permits is a change in course from his predecessors. The Obama administration issued the first license to export natural gas in 2011, and under Trump, LNG exports more than quadrupled.
And while the US is now a major energy player abroad, exporting more oil and gas can affect its own appetite for hydrocarbons. The pause is a signal to gas producers and buyers that the country is beginning to factor climate change into its international energy policies and opens the door to the far-away possibility that the US could one day turn off the taps altogether.
What is liquefied natural gas, and what makes it different from “regular” gas?
Natural gas is largely composed of methane, an odorless flammable gas. In the US, most natural gas is produced by hydraulic fracturing of shale, which releases gas trapped within the rock. That gas is then........