Writer: Andrea Teran
2 min read February 2024 — The Biden administration’s recent decision to pause Liquefied Natural Gas (LNG) export permits to non-Free Trade Agreement (FTA) countries represents a significant pivot in U.S. energy policy. This move, spearheaded by the Department of Energy (DOE), aims to reassess the economic and environmental implications of LNG exports through updated analyses that accurately capture the current state of greenhouse gas emissions and their potential impacts.
Amidst this policy shift the energy capital of the world finds itself at the forefront, grappling with the implications of this pause. In 2023, Houston arose as a central player in the international LNG export market, driving the United States to surpass Qatar and Australia as the world’s top LNG exporter, a feat underscored by the region’s major industry players like Freeport LNG, Cheniere Energy Inc., and Venture Global LNG Inc.
“Being present and proactive in Houston is a winning formula for business growth,” Ryan Birkenfeld, Executive Vice President of Exploration for the Tri-Star Group stated to Invest:. “This city serves as the epicenter of our global operations. Oil and gas are indispensable commodities, essential for the world’s daily functioning.”
The administration’s decision has elicited mixed reactions between promoting energy security, supporting economic growth, and addressing environmental concerns. Critics, including Texas officials and industry stakeholders, argue that the pause jeopardizes millions of high-paying jobs and could weaken the U.S.’s geopolitical stance by potentially diminishing energy security for allies in Europe, Asia, and the Middle East. Commissioner Dawn Buckingham of the Texas General Land Office highlighted the significant economic and national security implications for Texas, reflecting broader concerns over the impact on the nation’s standing as a top LNG exporter.
“In light of these facts, it’s unconscionable that our own federal government would take such drastic steps with the goal of shutting down this thriving industry,” Buckingham said to Fox Business. “I will always defend Texas’ right to energy independence and stand up for the hardworking families and countless Texas schoolchildren this reckless policy decision will harm.”
Conversely, supporters view the pause as a necessary step towards mitigating climate change and its associated risks, emphasizing the importance of transitioning to clean energy. By reassessing the environmental and economic impacts of LNG exports, the DOE seeks to align U.S. energy policies with broader climate goals, ensuring that methane emissions and the potential for increased energy costs for American consumers and manufacturers are considered.
As Roishetta Ozane from The Vessel Project highlighted to Reuters, “This is a milestone, it sets the stage for potential rejections and slows down progress of these projects.” Michelle Weindling of the Sunrise Movement also noted the strategic significance of this move for garnering youth support, “It needs to be seen that leaders are leading boldly and unapologetically to solve this crisis.”
The pause also raises challenges for companies within the Houston region and beyond that are awaiting permit approvals for new projects or expansions. Firms like Commonwealth LNG and Sempra’s Port Arthur LNG face uncertainty, impacting planning, investment decisions, and potentially the strategic direction of the industry itself. However, the administration has clarified that the pause will not affect existing export projects or those currently under construction but will indefinitely halt the approval of proposed projects waiting for permits, likely until 2025.
For more information please visit:
https://www.whitehouse.gov/
