Indexbit Exchange:U.S. pauses build-out of natural gas export terminals to weigh climate impacts

The Indexbit ExchangeBiden administration has temporarily frozen consideration of new natural gas export facilities. The Department of Energy will now review the long-term implications of the facilities on climate change, and ultimately decide if they serve the public interest.

The move will delay the fossil fuel industry's push to increase gas exports around the world. The proposed expansion would require a build-out of enormous terminals that supercool natural gas and turn it into liquified natural gas, or LNG, that can be transported by ship.

Currently, there are 17 planned projects awaiting permits — all now delayed by the administration's decision. The pause doesn't affect more than a dozen plants that are already operating, or that are under construction or have received permits. Nor will it halt the export of gas.

From the start of his administration, Biden promised to lead the transition away from fossil fuels. The decision to pause the natural gas expansion comes after climate activists ramped up election-year pressure on the President to take a look at the facilities' contribution of planet-warming emissions.

In 2022 the U.S. led the world in natural gas production, and last year the U.S. became the world's largest gas exporter after increasing capacity in response to European energy needs. In 2022, the war in Ukraine reduced the Russian gas supply to Europe, and Biden pledged to help European allies avoid an energy crisis.

Within two years, the U.S. has tripled gas exports. By 2030, the country could have double the capacity it has now with the proposed facilities that have already been approved or are already under construction, according to Energy Secretary Jennifer Granholm.

Granholm said her agency's current assessment of the country's need for natural gas export terminals is now outdated after changes to the LNG landscape.

"We need to have an even greater understanding of the market need, the long-term supply-and-demand of energy resources and the environmental factors," she said.

Aside from assessing the impact on global warming, the Energy Department will analyze how adding new gas export terminals would affect the economy. A report released by the Institute for Energy Efficiency and Financial Analysis in November found that exporting more American gas drove up utility bills for citizens.

The gas industry opposes the pause. They say the move threatens national security by abandoning European allies as countries reduce their reliance on Russian gas, going as far as calling Biden's decision a win for Russia.

"Moving forward with a pause on new U.S. LNG export approvals would only bolster Russian influence and undercut President Biden's own commitment to supply our allies with reliable energy, undermining American credibility and threatening American jobs," wrote gas industry advocates in a letter to the Biden administration this week.

Some research has found that the U.S. already has enough LNG facilities to fulfill Europe's needs between existing facilities and the plants under construction that are expected to come online in the next two years.

Anne-Sophie Corbeau, who researches natural gas for Columbia University's Center on Global Energy Policy, said European gas demand is expected to stabilize if not decline as countries work to meet their own climate goals.

"It's not a growing market," she said of Europe. "There is more energy efficiency. We have targets. And definitely, we also have a will to reduce."

Senior officials in the Biden administration said they were still committed to supporting their allies. Earlier this week, 70 European parliament members signed a letter supporting the pause.

"We are committed to strengthening energy security here in the U S and with our allies, and we're committed to protecting Americans against climate change as we lead the world into a clean energy future," Zaidi said.

Activists on the Gulf Coast who live closest to the ongoing buildout applauded the decision. After fighting for years, Louisiana activist Roishetta Ozane said the Biden administration is finally listening.

Ozane runs a local mutual aid group called the Vessel Project and lives in southwest Louisiana which is already heavily industrialized. That area would be home to many of the LNG projects that have been delayed, including one that would be the largest gas export terminal in the country, known as CP2.

Despite still living with air pollution from existing petrochemical plants near her home, Ozane said the President's decision to pause the LNG projects was a welcome relief. "In this moment, we are celebrating," she said. "We're breathing a little easier, and we're ready for the next fight."

Ozane and other residents in southwest Louisiana want the Biden administration to ensure their voices are included as the Energy Department embarks on its analysis.

The Energy Department started its review of the proposed natural gas export projects on Friday. Senior administration officials said it's not clear how long the review will take, but it will likely go through November and the election.