Lawmakers at a hearing Thursday raised concerns about the impact of a recent Biden administration decision to freeze permits for certain new export sites for liquefied natural gas, a major energy export for the U.S.
The White House announced the freeze in January, arguing that climate change concerns justify the decision and that the U.S. is already exporting enough natural gas for now.
“Today, we have an evolving understanding of the market need for LNG, the long-term supply of LNG, and the perilous impacts of methane on our planet,” the White House said in its announcement.
Biden’s announcement has major economic and foreign policy implications.
U.S. Rep. Clay Higgins, R-La, said at the hearing that “the American LNG industry had been feeding reliable, affordable, clean energy to our allies across the world, and because of various interruptions that have been planned and calculated, interruptions to American energy production, and dominance, and export, our European allies have had to rely on other sources for their raw energy products to power their grids across the continent.
He added that “the reliability of that supply chain has been crippled by Biden Administration policy decisions.”
U.S. Rep. Pete Fallon, R-Texas, who chairs the Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs, suggested the ban was politically motivated.
“Why then is the Biden Administration willing to say goodbye to one of the most important tools in the tool shed for reducing emissions?” Fallon said at the hearing. “The liquified natural gas pause sends the wrong message to the world, as do other clearly political decisions against U.S. energy interests. For the record, we should note that this pause, this ban will only be lifted after the November elections this year.”
Biden’s freeze has real economic implications, though. LNG also provides billions of dollars to the economy and supports thousands of jobs.
Pointing to those economic concerns, a coalition of about two dozen states sent a letter to the Biden administration demanding the freeze be lifted because it is “unlawful.”
“Generally, agency legislative rules must go through the APA’s notice-and-comments procedures,” the letter said. “And the pause here is a substantive rule required to go through that process. The pause effectively commands the Department to stop performing its obligations under the NGA to approve export applications and does not leave the agency free to exercise discretion unless it chooses to disobey the policy.”
About 16 states also filed a lawsuit arguing Biden overstepped his Constitutional authority with the freeze, as The Center Square previously reported.
“Biden’s unilateral decree disregards statutory mandates, flouts the legal process, upends the oil and gas industry, disrupts the Texas economy, and subverts our constitutional structure,” Texas Attorney General Paxton said in a statement. “The ban will drive billions of dollars in investment away from Texas, hinder our ability to maximize revenue for public schools, force Texas producers to flare excess natural gas instead of taking it to market, and annihilate critical jobs. I will not stand by while Biden attacks Texas.”
Biden’s freeze has a major foreign policy and global economic impact as well.
Russia is a major exporter of natural gas, and Europe relied heavily on that production. When Russia invaded Ukraine, Europe needed a different source for their energy needs.
Critics argue that Biden’s freeze sends the message that the U.S. will not seek to replace Russia in the global market.
Concerns aired at Thursday’s hearing are similar to testimony at a hearing earlier this year.
As The Center Square previously reported, James Watson, head of Eurogas, an association that represents 104 companies and associations, testified at a Senate Energy and Natural Resources Committee that Europe has depended much more on U.S. natural gas since the Russian war against Ukraine began.
“The U.S. is one of only two potential sources for providing the volumes of LNG that Europe needs to become independent from Russian gas as soon as possible, the other possibility is Qatar,” Watson testified “In the U.S. the pause in licensing affects around 50 bcm of projects that are awaiting a green light from the Department of Energy to start construction. We are aware that not all the capacity that is being built will be destined for Europe, clearly U.S. market actors have contracts with customers in Asia and Latin America.
“However, if that capacity does not come online in the next 2-3 years, then there is likely to be a shortfall of LNG in Europe and possibly globally,” Watson added.
