The Biden administration announced on Friday a freeze on new licenses for the export of US liquefied natural gas (LNG), initiating a comprehensive review of the impact of these shipments on climate change, the economy, and national security. The move, likely to disrupt multibillion-dollar projects, comes as the Energy Department conducts an analysis to update assumptions used in reviews, with the last update dating back to 2018.
President Joe Biden emphasized the need to scrutinize the impacts of LNG exports on energy costs, America’s energy security, and the environment. The moratorium reflects the administration’s recognition of the climate crisis as an existential threat.
The review, conducted by the Energy Department’s national labs, is expected to take months, during which no new LNG approvals will be granted. Energy Secretary Jennifer Granholm highlighted the need for a greater understanding of market dynamics, long-term energy supply and demand, and environmental factors.
The pause in permits could affect over a dozen proposals awaiting review, including projects by Commonwealth LNG and Energy Transfer LP in Louisiana. The politically sensitive issue forces Biden to balance competing priorities, with a potential impact on decisions regarding additional LNG exports until after the upcoming presidential election.
Environmentalists, led by figures like Bill McKibben, view the halt as a crucial step in addressing climate concerns. However, Republicans, including former President Donald Trump, accuse Biden of prioritizing his climate agenda over domestic jobs and economic interests.
The government’s existing analysis, according to White House National Climate Advisor Ali Zaidi, is outdated and does not reflect evolving information about methane’s warming potential. Advocates argue that LNG is crucial for transitioning away from coal, while environmentalists highlight methane leaks and potential investments in emission-free alternatives.
LNG advocates criticized the decision, expressing concerns about global risks and betrayal of allies, particularly amid geopolitical instability. The freeze impacts projects at various stages of development, with four projects facing significant hurdles without final export licenses from the Energy Department.
