White House is taking a closer look at the impact of liquefied natural gas exports
White House is taking a closer look at the impact of liquefied natural gas exports
The Joe Biden administration said Friday it would temporarily pause decisions on whether to allow some exports of liquefied natural gas. The U.S. is already the world’s largest LNG exporter, and our export capacity is set to double over the next few years.
The administration wants to review policies that help to determine whether the exports are good or bad for the American people. The White House says it will take a look at how LNG exports may impact the climate and communities that often bear the brunt of pollution.
A process for vetting LNG exports is already in place, but the White House is explicitly saying that process must take climate change and energy costs into account.
“The implication is that this approval process [will] at the very least become lengthier, and at worst may not lead to more approvals going forward,” said Samantha Dart, head of global natural gas research at Goldman Sachs.
Dart said this won’t have much of an impact in the short term because projects scheduled to come online in the next few years won’t be affected.
But longer term, “this is especially important for countries like Germany and for Europe more broadly,” said Benjamin Salisbury, senior energy policy analyst at Height Capital Markets.
“There’s the movement and impetus to wean themselves completely off cheap Russian natural gas. And they need to plan for years and decades ahead for alternative sources,” said Salisbury.
Domestically, this is also an energy security play, said Ademiju Allen at Rystad Energy.
And … a nod to politics.
“The administration ran on a very green initiative, so it’s important heading into an election to try to make sure that you actually come true on the initiatives that you ran on,” Allen said.
Even if the policy outcomes won’t kick in until long after Election Day.
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