The pause on new liquefied natural gas (LNG) export applications implemented by the Biden administration has sparked pushback from leading business groups in the U.S., Europe and Japan.
In a letter addressed to President Joe Biden, the U.S. Chamber of Commerce, Business Europe and Keidanren (Japan Business Federation) wrote that they’re concerned with the pause on new LNG export license applications to non-free trade agreement (FTA) countries.
"As you know, non-FTA countries Japan and the European Union, both of which are heavily dependent on imports of U.S. LNG for energy security," the three groups wrote. "We urge you to reconsider this decision in light of the unique and vital role of American natural gas in meeting the critical energy security and Paris Agreement objectives that our nations share."
The groups went on to say that LNG exports contribute positively to achieving greenhouse gas emissions reduction targets as a relatively clean transitional fuel in comparison to alternatives like coal. They added that geopolitical tensions stemming from Russia’s invasion of Ukraine make U.S. LNG supplies critical for Europe and Japan as they look to reduce dependence on Russian gas.
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"In the aftermath of Russia’s unwarranted invasion of Ukraine, these crucial supplies helped the people of Europe and Japan heat and power their homes, factories, and businesses at a time of great need and uncertainty," the groups wrote. "Further diversification is necessary, and with numerous forecasts projecting global natural gas demand to rise well into the next decade, additional supplies of LNG will be needed to supply world markets."
The Biden administration, acting through the Department of Energy (DOE), implemented a pause on new LNG export authorization requests to consider whether exports to non-FTA countries are in the public interest. The move doesn’t impact previously approved export applications and the DOE noted that the U.S. currently has the capacity to export 14 billion cubic feet of LNG per day, with 48 billion cubic feet in total authorizations approved.
"The administration is committed to the affordability of energy and economic opportunities for all Americans; ensuing energy security here in the U.S. and with our allies; and protecting Americans against climate change and winning the clean energy future," Secretary of Energy Jennifer Granholm said in a statement announcing the pause. "This practical action will ensure that DOE remains a responsible actor using the most up-to-date economic and environmental analyses."
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FOX Business Network contributor Phil Flynn said the move is a "devastating blow not only to the global economy but for U.S. natural gas producers."
"A lot of them invested a lot of money on the perception that President Biden was going to make good on his promise to supply Europe with reliable energy like liquefied natural gas and playing politics with this decision is costing them a lot of money and could put a lot of them out of business," he explained.
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"At the same time, it’s terrible for the environment. Liquefied natural gas is one of the cleanest burning fossil fuels, it’s the only reason the world can replace coal," Flynn added. "And if we don’t export LNG I can guarantee you the world’s going to burn a lot more coal and make the world a dirtier place."
Last year, the U.S. surpassed Australia and Qatar as the world’s largest LNG exporter – with Europe as the largest importer followed by countries in Asia. Japan was the world’s second-largest importer of LNG in 2023, according to data from the country’s finance ministry, and the share of its imports from the U.S. rose by 34% year-over-year as imports from the Middle East and Russia fell by 12% and 11%, respectively.
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"The United States is the Saudi Arabia of natural gas," Flynn said. "We have the capacity to feed the world, and if we don’t feed the world, some other countries will step in and fill that void. And it’s just a sad situation because we know that some of the other producers, especially producers like Russia and OPEC, don’t have our best interest at the forefront."
Reuters contributed to this report.
