US Allies Fear LNG Export Freeze, Biden Says No Impact

President reassures partners as lawmakers urge end to review

by Victor Adetimilehin

The US government has sought to calm the concerns of its allies over the future of liquefied natural gas (LNG) exports, amid a pause on new approvals by President Joe Biden.

Biden said the pause, announced in January, would give time for the Department of Energy to take a “hard look” at the environmental and economic impacts of the booming industry. The pause could stop approvals for exports from LNG projects until after the November 5 election.

But Geoffrey Pyatt, an assistant secretary for energy resources, told reporters on Monday that the policy would not affect current permits or shipments of LNG.

“I’ve found that our allies who raise these issues with me, tend to be quickly reassured when you explain to them what this is, which is a pause,” not a reversal, Pyatt said. “This policy will have no impact on currently permitted LNG exports.”

The US is the world’s top LNG exporter and Pyatt said the shipments would roughly double by the end of the decade as already approved projects ramp up.

“When you lay all of this out, it’s pretty clear that there is no reason for concern among our allies, whether they be in Asia like Japan, or in Europe,” Pyatt said.

Japan’s top LNG buyer JERA and Germany’s gas importers SEFE and Uniper, which plan to buy gas from Venture Global LNG’s Calcasieu Pass 2 plant, one of the projects affected by the pause, have expressed worries about the security of energy supply.

Some European countries, such as Poland and Lithuania, have also turned to US LNG to reduce their dependence on Russian gas.

Lawmakers pressure Biden

More than 150 lawmakers in the Republican-controlled US House of Representatives wrote to Biden on Sunday urging him to end the review and approve all pending applications.

“Policies supporting LNG exports will grow our economy, create good paying jobs, and strengthen the energy security of our allies,” they said in a letter.

The letter also cited a report by the US Energy Information Administration that found LNG exports could reduce global greenhouse gas emissions by displacing coal-fired power plants in Asia and Europe.

However, some environmental groups have challenged that claim, arguing that LNG production and transportation emit large amounts of methane, a potent greenhouse gas.

They have also warned that LNG exports could increase domestic gas prices and encourage more fracking, a controversial drilling technique that can pollute water and land.

Biden has pledged to make the US a global leader in the fight against climate change and to achieve net-zero emissions by 2050.

He has also ordered a review of the federal oil and gas leasing program and suspended new leases on public lands and waters.

The LNG industry has said it supports Biden’s climate goals and hopes to work with his administration to expand the global market for US gas.

Despite the uncertainty over the LNG export policy, some analysts have said the pause could be an opportunity for the industry to demonstrate its environmental and social benefits.

LNG could also play a role in the development of renewable energy, such as wind and solar, by providing backup power when the weather is unfavorable.

Some experts have also suggested that LNG could be blended with hydrogen or biogas to reduce its carbon footprint.

As the world moves towards a low-carbon future, the US LNG industry may have to adapt and innovate to stay competitive and relevant.

But with a supportive government and a strong demand from its allies, the US may still have a chance to lead the global LNG market and contribute to the global energy transition.

Source: Reuters

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