Political fight intensifies over Biden’s pause on new LNG export permits

Open this photo in gallery:

The political fight is intensifying over the Biden administration’s decision to pause new export permits for liquefied natural gas as a coalition of Republican-led states argues that the U.S. clampdown is unlawful.

West Virginia Attorney-General Patrick Morrisey is co-leading the group of 22 states, asking President Joe Biden and U.S. Energy Secretary Jennifer Granholm to reverse the administration’s pause.

In their letter sent on Tuesday, the Republican Attorneys-General said the White House and U.S. Energy Department didn’t cite any statutory authority to outright reject export permits when Mr. Biden announced the LNG restrictions on Jan. 26.

The White House is relying on Mr. Biden’s executive order that raises fears about climate change, according to the letter by Mr. Morrisey and his state colleagues, who noted that the U.S. is the world’s largest LNG exporter.

Demand in Europe for LNG surged after Russia invaded Ukraine two years ago. The war in Ukraine upended global energy markets, leaving Europe scrambling to reduce its dependence on natural gas from Russia.

“Freezing American LNG exports is a win for Russia and Vladimir Putin,” the state Attorneys-General said. “Your administration does not have to recklessly continue down an unlawful path that harms our economic and national security interests.”

The backlash from the Attorneys-General follows a subcommittee hearing in Washington on Tuesday, when Republican members of the House of Representatives clashed with Democrats.

While the debate split along party lines during the hearing, 10 House Democrats sent a letter dated Feb. 1 to Mr. Biden, urging him to support new LNG exports.

Biden’s pause on U.S. LNG spurs hopes for B.C. plans while climate activists urge restraint

Two of the seven U.S. LNG export terminals are located in Texas, with more facilities envisaged for the Lone Star state.

“The export of U.S. LNG is a linchpin for fostering strong international partnerships, diversifying energy supplies and reducing dependence on volatile regions,” said the letter signed by Marc Veasey and nine other House Democrats.

On the U.S. Gulf Coast, besides the two LNG export terminals in Texas, there are also three facilities in Louisiana.

Over the past decade, Canadian pipeline giants Enbridge Inc. ENB-T and TC Energy Corp. TRP-T have been able to expand their pipeline networks along the U.S. Gulf Coast.

“U.S. LNG is critical for cutting global emissions by countries that are using it to replace higher-emitting fuels such as coal for power generation. It’s a safe, affordable and reliable source of energy that can stabilize global energy markets,” Enbridge spokesperson Gina Sutherland said in an e-mail on Wednesday.

But Ember, an environmental think tank, released a study this week that said the European Union’s power industry is rapidly changing. “Fossil fuels are playing a smaller role than ever as a system with wind and solar as its backbone comes into view,” Ember’s European program director, Sarah Brown, said in a news release.

The Senate committee on energy and natural resources, chaired by Democrat Joe Manchin from West Virginia, will hold a hearing in Washington on Thursday to scrutinize Mr. Biden’s LNG announcement.

Among the flurry of letters to the Democratic President is one sent by more than 150 House Republicans, led by Cathy McMorris Rodgers, who is chair of energy and commerce committee. “Actions that slow or halt the ability to export U.S. LNG would weaken global energy security,” the House Republicans said.

Canadian energy producers dismayed by Biden’s move to pause U.S. LNG approvals

In another letter, seven Democrats who are members of the bipartisan Congressional Energy Export Caucus joined 16 Republicans to express their concerns about delays to approve new LNG export projects.

In Asia, the Institute of Energy Economics Japan said this week that Mr. Biden’s LNG move has created uncertainty as the U.S. Energy Department conducts environmental and economic analyses. The institute said Japan and other countries buying LNG have previously asked the U.S. to expedite export approvals.

In contrast to the U.S. becoming the world’s top LNG exporter, Canada has no export terminals up and running. The first to enter service would be the Shell PLC-led LNG Canada project in Kitimat, B.C., which is scheduled to begin loading tankers bound for Asia by 2025.

Climate activists in Canada are urging Ottawa to follow Mr. Biden’s lead, notably by restricting LNG exports from British Columbia. The activists are opposed to financial institutions that would lend money to LNG Canada’s proposed Phase 2 expansion and four other LNG projects in B.C.

Canada should move away from fossil fuels such as natural gas and LNG, said the groups, including the Sierra Club, Gidimt’en Checkpoint and the Canadian Association of Physicians for the Environment.