President Joe Biden’s top advisers are divided over how much to ramp up environmental scrutiny of licenses to ship natural gas abroad as companies and industry groups warn it could slow development of new export terminals, according to people familiar with the matter.
Administration officials who support taking a tougher approach argue it’s important on both climate and political grounds and are worried that the US has already authorized too much natural gas to flow overseas, said the people, who asked not to be named detailing private deliberations.
Biden has already alienated some young, climate-minded voters with his administration’s approval of ConocoPhillips’ $8 billion Willow oil development in Alaska last year, and he’s under increasing pressure to limit US crude and gas exports before the November elections. The younger electorate, incensed over the Willow approval, have come to view the multibillion dollar liquefied natural gas export projects as a test of the president’s commitment to fighting climate change.
Even so, the issue is complex — cutting across myriad geopolitical, domestic and other interests. Biden pledged to provide more natural gas to Europe after Russia’s invasion of Ukraine. The US is now the world’s largest LNG exporter, and any change in policy could have have far-reaching consequences for the industry. Advisers have raised concerns about the economic risk.
Among the administration officials leading the push for a more stringent climate test are Energy Secretary Jennifer Granholm and advisers John Podesta and Ali Zaidi, according to the people. At the same time, officials who raised concerns include National Security Advisor Jake Sullivan, presidential energy adviser Amos Hochstein, and Sarah Ladislaw, Biden’s special assistant for climate and energy.
“The administration is aligned on the importance of this priority,” White House spokesperson Angelo Fernandez Hernandez said Friday. The Energy Department didn’t immediately respond to a request for comment.
Increased climate scrutiny could imperil billions of dollars in new export projects that are awaiting the Energy Department’s blessing, including Venture Global LNG Inc.’s CP2 project, near its existing Calcasieu Pass export plant in Louisiana, and a proposed terminal in Louisiana by Commonwealth LNG.
Overall, top advisers are broadly aligned on the need to make changes — especially after the US and nearly 200 other nations committed in December to transition away from fossil fuels. The fault lines are over how aggressive to be. Those pushing for less drastic action have invoked Russia’s invasion of Ukraine while advocating taking an approach that addresses the climate argument and preserves a US economic resource.
A presidential decision memo on the issue is expected in the coming weeks. One option could be a formal Energy Department rulemaking that could require a robust federal environmental review of LNG export projects and their potential lifeycyle greenhouse gas emissions.
The prospect has ignited a flurry of lobbying, as gas and pipeline companies warn the White House that a pause in LNG export approvals would undermine the climate benefits of using American natural gas to displace coal in power plants around the world.
Even without formal rulemaking, a review could be used to justify a pause in a making decisions on existing LNG export applications — potentially until after the Nov. 5 presidential elections.
Such an approach has been taken before by the Obama administration, which commissioned a third-party study of the potential economic consequences of expanded LNG exports after authorizing a Cheniere Energy Inc. LNG export facility in Louisiana — and as other potential exporters lined up for licenses. The Energy Department then factored those conclusions into individual, case-by-case reviews of proposed exports.
Environmentalists have warned against an expansion of new natural gas infrastructure they say will prolong for decades the use of that fossil fuel, which burns more cleanly than coal but nevertheless contributes to climate change.
