In a massive report destined to have little impact, the Biden administration’s Department of Energy Tuesday (Dec. 17) said increasing exports of liquefied natural gas could raise prices to U.S. consumers across the economy.
The 601-page report (a 28-page summary, and four appendices of 220, 83, 136, and 104 pages respectively) comes after the White House a year ago imposed a halt on DOE approvals on some new LNG export terminals. During the presidential campaign, Trump campaign lied that the Biden pause was a ban on U.S. LNG exports. The U.S. was and remains the world’s largest exporter of LNG.
In a statement accompanying the report, Energy Secretary Jennifer Granholm said, “U.S. LNG exports have already tripled over the past five years, will double again by 2030, and could double yet again under existing authorizations. The quantities already approved for export equate to roughly half of the U.S.’s total current natural gas production today. In 4 of 5 modeling scenarios included in today’s study, the amounts that have already been approved will be more than sufficient to meet global demand for U.S. LNG for decades to come.”
Granholm added that “unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30%. Unconstrained exports of LNG would increase costs for the average American household by well over $100 more per year by 2050.” Such increases would also lead to increased emissions of greenhouse gases “despite very aggressive assumptions in the model regarding deployment of carbon capture, utilization, and storage….”
The DOE study is unlikely to deter the incoming Trump administration’s desire to increase domestic natural gas production and LNG exports. Trump, while mischaracterizing Biden’s “pause” on some, but not all, new export terminals last January, repeatedly said he would end it on his “very first day back” in the White House. Given all the things Trump has said he will do on his first day in office, he must hope that day extends to at least 48 hours.
“With so many permitted projects struggling to secure contracts, pausing LNG approvals was an easy, low-stakes political win” — Wall Street Journal
At the time of the Biden pause, the Wall Street Journal commented, “With so many permitted projects struggling to secure contracts, pausing LNG approvals was an easy, low-stakes political win.”
Trump’s announced nominee to become energy secretary, Denver energy executive Chris Wright, 60, is the founder of Liberty Energy. The company provides equipment used in hydraulic fracturing, which has revolutionized natural gas and oil production in the U.S., turning the country into the world’s leading oil and gas producer.
Reporting on the DOE study, the Washington Post commented, “Environmentalists plan to cite the analysis in future lawsuits over the Trump administration’s approvals of these projects, which some have called ‘climate bombs’ because of their enormous environmental footprints.” The federal government’s legal authority over LNG exports – involving both the Federal Energy Regulatory Commission and DOE – is unambiguous.
In February, 2020, during the Trump administration, the Federal Energy Regulatory Commission rejected a $10 billion LNG export terminal planned for Coos Bay, Ore. The decision had the support of both Democratic Commissioner Richard Glick and Trump appointee Bernard McNamee. The project sponsors cancelled it in late 2021.Earlier, in April 2019, FERC approved two new LNG export terminals: Driftwood LNG (now Louisiana LNG) in Louisiana and Port Arthur LNG in Texas. Both are under construction.
Sen. Sheldon Whitehouse (D-R.I.) commented, “Greenlighting additional LNG export capacity would only exacerbate the mounting costs of climate change to both American families and the economy.” He added, “The report also finds that increased LNG exports will directly raise costs on consumers and industry, as more American gas is shipped overseas. Much of our LNG is set to feed the Chinese market, advantaging a foreign competitor at the expense of Americans and our own industrial competitiveness.”
Whitehouse, chairman of the Senate Budget Committee and a senior member of the Environment and Public Works Committee will become the ranking Democrat on the environment committee when the GOP takes control of the Senate in January.
Karen Harbert, head of the American Gas Association, the lobbying group for the nation’s investor-owned gas utilities, said, “The Biden Administration’s pause on American LNG exports was a mistake that resulted in uncertainty for the market, for investors, and for America’s allies around the world. This report is a clear and inexplicable attempt to justify their grave policy error.”
Amid the recent political scrum over LNG exports, Bloomberg last week (Dec. 13) reported, “Venture Global LNG Inc. has started producing liquefied natural gas at its Plaquemines plant in Louisiana, making the site the eighth gas export facility in the US.” Bloomberg added that LNG producer Venture Global plans to file for an initial public offering.
–Kennedy Maize
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