Supporters of U.S. natural gas exports are blasting the White House over reports the Biden administration could stall a decision on a contentious gas terminal planned for the Louisiana coast, saying such a move would disrupt global energy supplies.
The White House has directed the Department of Energy to widen its review of the Calcasieu Pass 2 project to consider the terminal’s influence on climate change, The New York Times reported Wednesday. The CP2 project — which green groups are targeting as a symbol of a continuing reliance on fossil fuels — would liquefy and export 20 million metric tons of gas overseas per year from Louisiana’s Cameron Parish.
The debate over LNG flared up earlier this month following a story from POLITICO, which said DOE was launching a review to see whether federal officials should consider climate change when deciding if a LNG export project is in the national interest. Industry trade groups have said the move is politically motivated — and that a review could ultimately hinder investment in the U.S. LNG sector.
“It appears that individuals within the White House are trying to force policymaking through leaks to the media,” said Shaylyn Hynes, a spokesperson for CP2 developer Venture Global, in a statement Wednesday. “This continues to create uncertainty about whether our allies can rely on US LNG for their energy security.”
Hynes said a potential moratorium on approvals for new U.S. LNG projects — if it happened — “would shock the global energy market” and lead to higher emissions as the world turns to coal.
The White House remained tight-lipped Wednesday, with White House assistant press secretary Angelo Fernández Hernández declining to comment.
The U.S. is already the world’s largest exporter of natural gas, and the $10 billion CP2 project could boost daily U.S. LNG shipments by about 20 percent.
Since POLITICO first reported this month on potential changes at DOE, the agency has faced a cascading wave of letters about any updates to its criteria for LNG exports.
Letters in opposition to a revamp at DOE have come from some lawmakers and oil and gas trade associations. They came from Sen. John Kennedy (R-La.), ranking member on the Energy-Water Appropriations Subcommittee, and the Partnership to Address Global Emissions (PAGE), whose membership includes natural gas producer EQT and pipeline firm Enbridge.
The head of the American Exploration and Production Council said Wednesday the United States needs to send more LNG overseas, not less.
“Any action or future plan to hinder American LNG exports, including the White House’s reported pause on CP2, is misguided policy that undermines the US economy, our allies’ security, and global emissions goals,” said Anne Bradbury, CEO of AXPC, in a statement.
Also on Wednesday, more than 30 trade associations tied to LNG wrote to Energy Secretary Jennifer Granholm to push back against “any action to halt U.S. LNG export approvals.” Signatories included the American Petroleum Institute, the Center for LNG and the Louisiana Mid-Continent Oil & Gas Association.
Supporters question why the DOE’s reported focus is on CP2, a project that has yet to get full authorization from the Federal Energy Regulatory Commission.
FERC authorizes the siting and construction of LNG import and export facilities, while DOE approves export licenses to projects so they can export gas to countries that lack a free-trade agreement with the United States — a group that includes all European countries.
FERC is an independent agency that does not take orders from the White House, though presidents nominate commissioners and senators confirm them. Its next open meeting is scheduled for Feb. 15.
A FERC spokesperson did not respond to a question Wednesday about if CP2 would be on the agenda at its next opening meeting.
“Nobody has said anything official to anybody,” said Fred Hutchison, CEO of the industry group LNG Allies, referring to Biden administration communication with LNG companies. “We’re reading these leaks that are coming out.”
Hutchison pointed to several LNG projects that have already cleared FERC and are now awaiting DOE approval, including one led by Commonwealth LNG.
‘Big, big step’
However, environmental groups have said President Joe Biden needs to make changes on LNG if he’s going to seriously address climate change.
In an opinion piece published Wednesday by The Washington Post, Ben Jealous, the executive director of the Sierra Club, and Bill McKibben, founder of climate action group Third Act, said Biden needs to make good on a deal struck last month in Dubai, United Arab Emirates, that calls for transitioning away from fossil fuels starting this decade.
“There is no possible definition of that phrase that is compatible with a massive buildout of LNG export capacity,” Jealous and McKibben said in the piece. “If President Biden doesn’t do what he can to halt this expansion, then those were clearly just words on paper.”
In an interview Wednesday, Mahyar Sorour, the Sierra Club’s director of its Beyond Fossil Fuels policy, said if DOE’s criteria around LNG and the public interest is updated and modernized, the agency would find that CP2 and “really any new LNG export facility” is not in the public interest.
For months, the White House has been hosting meetings with LNG critics. Collin Rees, U.S. program manager at the environmental group Oil Change International, said the group urged the White House to restrict LNG during multiple meetings recently.
Meanwhile, Michael Greenberg, founder of the group Climate Defiance, said he met with White House clean energy adviser John Podesta, in December. Climate Defiance activists protested senior Biden administration officials like Podesta repeatedly throughout 2023.
“If the reports are true, this is a big, big step in the right direction. It shows the power of direct action in catalyzing sweeping changes,” Greenberg said in an interview, urging the White House to curtail oil exports as well.
LNG companies often refer to a 2018 DOE-commissioned study to bolster their case for exports. The study, which DOE sought to “inform its decision on pending and future applications,” identifies LNG as a boon to the U.S. economy.
A separate 2019 study on the climate change impacts of LNG, conducted by the DOE-affiliated National Energy Technology Laboratory, found that U.S. LNG exported to Europe and Asia produce less greenhouse gas emissions than coal produced and consumed in those regions. DOE often cites the findings in LNG export approvals.
Environmentalists say the studies are outdated, and both LNG supporters and critics continue to study LNG life cycle emissions.
Tyson Slocum, director of the energy program at consumer advocacy group Public Citizen, said DOE needs to move carefully on new LNG climate regulations or it will run afoul of the courts.
“If the Department of Energy’s making any sort of significant change to the criteria [evaluated for approval], you’ve got to put that through a notice and public comment process,” Slocum said. “Otherwise, the industry can say it was an arbitrary change, … and courts, especially these days, would likely side with industry on that.”
DOE did not respond to an E&E News request for comment Wednesday. In November, the department said its current approach to export reviews allows the agency “the flexibility to adapt to changing economic and environmental circumstances.”
A ‘climate test’?
On Tuesday, a spokesperson for climate action and energy at the European Commission declined to comment on “internal discussions” within the Biden administration, but said representatives from the EU body speak regularly with U.S. officials.
“The US has been a key ally and partner in our energy supply diversification efforts over the past two years, and has become our main LNG supplier,” said Tim McPhie, a spokesperson at the European Commission, in an email.
McPhie added that increased LNG from the United States is part of a broader plan to phase out imports of Russian fossil fuels.
The U.S.-EU Task Force on Energy Security — formed in March 2022 roughly a month after Russia’s invasion of Ukraine — last met in October 2023, McPhie said.
Last July, DOE denied a decade-old petition from environmental groups — including the Sierra Club and the Center for Biological Diversity — that called on the agency to bring about “new regulations or guidance defining the process by which it will consider applications to export” LNG. DOE issued the denial after the green groups filed a lawsuit.
Still, top White House officials indicate DOE has the authority to restrict LNG exports.
“The department’s got public interest determinations that they need to make based on a set of factors,” White House national climate adviser Ali Zaidi told reporters at an event last week. “That’s what the department needs to make an assessment on — how to apply those factors and what informs that.”
The LNG debate holds relevance for the 2024 campaign, considering that former President Donald Trump and United Nations Ambassador Nikki Haley of the Republican Party have been attacking Biden’s record on oil and gas.
On Wednesday, Senate Minority Leader Mitch McConnell said the White House would harm U.S. and allied interests with more strict regulations on LNG exports.
“At the behest of climate activists, the administration is now considering adding a ‘climate test’ to the ‘national interest’ analysis regulators conduct before approving new LNG projects,” McConnell said on the Senate floor. “Never mind that climate interests all too often run in the exact opposite direction of America’s national interests. This move would amount to a functional ban on new LNG export permits.”
The New York Times’ story Wednesday mentioned recent White House communication with Alex Haraus, a 25-year-old campaigner on TikTok and Instagram who has criticized the CP2 project.
LNG supporters blasted the reported interaction with Haraus, who couldn’t be reached for comment by E&E News on Wednesday.
“If we’re going to make decisions on how many TikTok and Instagram impressions somebody gets, then the Republic is in sad shape,” said Hutchison of LNG Allies.