Biden’s LNG-Export Study Presents ‘Speed Bump’ for Trump

The Biden administration released a key study Tuesday that is likely to complicate President-elect Donald Trump’s plans to quickly approve more exports of liquefied natural gas.

The study, which analyzed the economic, environmental and other costs of such shipments, found increased exports would raise natural gas prices for a range of domestic consumers. The price gains were seen as high as 30% in one scenario that examined “unfettered exports,” according to a summary of the study released by the Energy Department. In addition, the study also found higher exports would be more likely to displace renewable energy, rather than coal, and would lead to an increase in global emissions.

The analysis found that currently approved LNG-shipment amounts are “more than enough to meet global demand for decades to come,” Energy Secretary Jennifer Granholm told reporters Tuesday.

“Further increasing exports, unconstrained, would surely generate more wealth for the LNG industry, but American consumers and communities and climate would pay the price,” Granholm said.

Halt on Permits

The study, underway since January, stopped short of saying the approval of more shipments isn’t in the public interest. While the study is final, it is still subject to a a 60-day comment period.

President Joe Biden’s administration launched the analysis while imposing a halt on new LNG export licenses, a moratorium Trump has vowed to end on his first day back in the White House.

Analysts said before the study was released that findings showing additional exports cause more harm than good could make new approvals issued by Trump’s administration vulnerable to legal challenges.

Fred Hutchison, president of the advocacy group LNG Allies, said his initial overall take of the analysis was that it was more of a “speed bump than a roadblock.”

‘Legal Durability’

“We expect the Trump administration to have ample opportunity to correct whatever needs to be corrected,” Hutchison added in an interview prior to the report’s release. “They want them approved promptly, but they also want legal durability.”

Environmental groups said the study showed further permits to export LNG should be rejected.

“LNG exports are a losing bet for our climate, communities, and economy,” said Jamie Henn, executive director of Fossil Free Media. “The findings are clear: in any future where we successfully tackle the climate crisis, there’s simply no room for more LNG export terminals.”

A federal judge in Louisiana lifted the temporary moratorium in July after 16 states filed a lawsuit arguing the pause violated federal law, though there is nothing that requires the Biden administration to approve exports.

Contention over the LNG licenses has major implications for Venture Global LNG Inc.’s proposed LNG export facility in Louisiana, known as CP2, as well as projects by Energy Transfer LP and closely-held Commonwealth LNG that are also awaiting Energy Department approval.

Energy industry groups countered the release of the study on Tuesday with comments citing the abundance of shale resources available in the US that could be used to tap increased LNG exports.

“Since the onset of the shale revolution, we’ve seen rising demand met with rising production. And we have the supply to meet more of both,” Dena Wiggins, president and chief executive officer of Natural Gas Supply Association, said in a statement.

A competing study by analysis firm S&P Global, commissioned by the US Chamber of Commerce, touted the economic benefits of increased LNG exports to jobs and contributions toward the economy.

“It’s time to lift the pause on new LNG export permits and restore American energy leadership around the world,” said Mike Sommers, the president of the American Petroleum Institute. “After nearly a year of a politically-motivated pause that has only weakened global energy security, it’s never been clearer that US LNG is critical for meeting growing demand for affordable, reliable energy while supporting our allies overseas.”

Photo: Photographer: Mark Felix/Bloomberg