LNG Export Licensing Freeze Endangers Jobs, Energy Security
There has been a flurry of media coverage about President Biden's directive to the Department of Energy (DOE) to "pause" reviews of applications for licenses to export LNG from U.S. terminals. The stated purpose was to study and determine whether LNG exports harm the environment or climate, and whether export applications should be considered through that lens.
The freeze immediately applies to twelve export terminals located along the Texas-Louisiana Gulf Coast with applications pending at DOE. These are either planned new facilities or expansions of existing terminals, which collectively would add up to 15 billion cubic feet per day of new natural gas production and exports to our already world-leading capacity.
An even greater danger is that it could also impact LNG terminals already in operation, those under construction, and those that have received licenses but are not yet under construction, should DOE determine that licenses already granted were issued as a result of a review retroactively considered flawed under new rules.
There are many reasons why this freeze is profoundly bad policy. To register our opposition, EEIA has authored, coordinated and sent a multi-association sign-on letter on behalf of the natural gas infrastructure supply chain, directed to the President with copies to Members of Congress.
The letter details why this policy (1) endangers our allies who now question whether they can rely for the long term on American energy to replace supplies from Russia, (2) kills the potential for tens of thousands of new American jobs, (3) discourages major investments by companies and their financial institutions by adding permitting risk, (4) endangers American energy security, and (5) will likely retard progress on climate because American LNG is most often used by consuming countries to replace higher-emitting fuels for power generation.
Until now, applications to DOE for export licenses have been relatively expeditiously processed and granted after finding those exports to be in the U.S. public interest. The rationale given for the sudden change in policy was that the Administration feels obliged to ensure that its public interest determinations are made in light of any impact on environment and climate from producing, exporting and consuming more natural gas.
Congress has held hearings on this freeze, with the potential of considering legislation to reverse it, possibly with bi-partisan support. The Senate Energy Committee, chaired by Senator Joe Manchin, met February 8, 2024 and our letter was entered into the hearing's official record.
We ask that company leaders forward this letter to their Senators and Congressmen, so they hear directly from constituents about the policy's potential to wreak damage on jobs and investment in their jurisdictions.