To judge by the volume of recent reporting, the number one US climate and energy issue of 2024 might be summed up in three words - Liquified Natural Gas. LNG has been simmering somewhere below the public radar for some time, but its astonishing growth in the past few years has finally attracted the notice of healthy climate advocates. To draw attention to the threat that LNG expansion poses to the climate, advocates took a page from their successful opposition to the Keystone tar sands oil pipeline, focusing their attention on a single facility. This is the massive Calcasiue Pass 2 (CP2) LNG export terminal proposed for the Louisiana Gulf Coast, west of New Orleans.
As with Keystone, the well-known author and activist Bill McKibben helped galvanize opposition to CP2, here with a timely article in the New Yorker last Fall, which set out the dimensions of the problem. The subsequent grass-roots advocacy included credible threats of a sit-in at the Department of Energy, which has to approve gas exports coming from the facility. Victory came quickly: two weeks ago, the Biden administration responded by postponing approvals of CP2 and other proposed terminals, subject to the development of new review criteria. The President stated that the new criteria will include the impacts of LNG exports on energy costs, America's energy security, and the environment, asserting further that the pause reflects his view of climate change as the existential threat of our time. Condemnation from Republicans and fossil fuel interests was swift, setting the stage for a high-stakes battle. As we enter the election season, LNG exports look poised to become a key proxy issue signaling where candidates stand on climate change action.
The path to CP2 begins with fracking technology, which US oil and gas companies began developing over twenty years ago. Faced with declining yields from conventional oil and gas deposits, the firms developed the ability to inject mixtures of water, sand and other chemicals at high pressure into previously intractable rocks, especially fine-grained sedimentary shales. This breaks up the structure of the shale, allowing access to the oil and gas trapped in its pores. Fracking is now used routinely on shale rocks in the Eastern and Western US, and is responsible for huge production increases since the late 2000s. But because domestic demand is limited, the increased supply threatened to drive down prices. Hence a new, two-part strategy was devised to ensure high revenues. First, fossil fuel firms successfully lobbied President Obama to remove the US ban on crude oil exports, which had been in place for forty years. At the same time, the companies invested in another technology: compression and liquefaction of natural gas at extremely cold temperatures, below -160C. In this condensed and liquified form, the natural gas can be shipped around the world in specialized tankers, and then regasified at its destination.
In 2016, the US exported practically no natural gas by tanker, but in the last seven years the LNG export industry has grown so fast that today the US is the world leader. In the first half of 2023, the US exported an average of 11.6 billion cubic feet (bcf) of natural gas per day, a four-fold increase since 2018. This amounts to a little over one-eighth of domestic natural gas consumption. The LNG is exported from eight operating terminals with a total capacity of 14.5 bcf, with all of the largest facilities located on the Gulf Coast. Seven more export terminals are under construction, all on the Gulf Coast in Texas or Louisiana. Together, these new terminals have a total capacity of nearly 17 bcf, more than doubling the potential for LNG exports. For comparison, the proposed CP2 terminal has a capacity of about 4 bcf, largest among 17 more envisioned projects for which construction has yet to start. Some or all of these projects are now in limbo with the Biden decision to pause review.
The authority for permitting LNG export terminals is divided between two agencies. The Federal Energy Regulatory Commission is an independent agency with five commissioners appointed by the President and confirmed by the Senate, with a 3-2 partisan split in favor of the President's party. The Natural Gas Act gives FERC the legal authority to decide whether applications to construct new LNG export terminals at specific locations should be approved, considering factors such as the reliability of the US natural gas supply and its interplay with international markets. FERC also leads environmental impact reviews under the National Environmental Policy Act. The other agency, the Department of Energy, approves the actual export of the LNG, subjecting most of these exports to a "public interest" test. DOE approvals have been routine in the past, but this is where the new Biden decision takes effect. DOE will now begin a process to look at whether climate change impacts should be included as part of the public interest determination. Two years ago, FERC commissioners voted to include climate change in their reviews, but have apparently not been able to figure out how to do that, and are continuing to approve new facilities without considering these impacts.
DOE has not offered a timetable for how long the review process and development of new "public interest" criteria is likely to take, but it is implausible that anything will be forthcoming before the November election. This means a moratorium of at least a year on further approvals, which gives plenty of time for the potentially transformative nature of President Biden's decision to sink in. While a labyrinth of permit approvals and regulations exist at local, state and federal levels, the reality has been that fossil fuel companies can almost always negotiate these to build the facilities they want. Advocates were successful at stopping the Keystone pipeline, but many other pipelines were approved during that multiyear effort. Similarly, only a single LNG export terminal, the proposed Jordan Cove facility in Coos Bay, Oregon, has ever been denied - and that was only because its proponents were unable to demonstrate a viable market for the gas.
Now, for the first time, the federal government is looking to put in place what everybody knows must happen - a process to systematically deny the private sector the right to build new oil and gas infrastructure, on grounds of climate change. If President Biden wins reelection, all eyes will be on whether the DOE will have the guts to enact review criteria stringent enough to substantially curtail new LNG export terminals. Of course, this would not have been necessary had the all-Democratic Congress been able to enact an aggressive carbon tax in the 2021-2022 session - because the added cost of continued mining would have driven the fossil fuel firms to invest in green technologies instead of more fossil fuels. It would have been pointless for DOE to engage in laborious top-down regulation when the desired outcome would arise from market forces. But the oil and gas industry successfully squashed that effort, which for a time appeared to have a serious chance of emerging from the Senate Finance committee. An economy-wide carbon tax would also have applied across the board to curtail all fossil fuel development, while the new DOE effort targets only LNG export terminals.
Biden's decision in this election year is already driving escalating rhetoric, coupled with misleading statements coming from both sides. Sadly, some climate researchers, who should know better, are contributing to the problem. In December, 170 scientists penned a letter to President Biden asking him to reject CP2 and other LNG export terminals on grounds of climate damages. That is of course fine, but the problem is that the letter cites an unpublished study from Cornell scientist Robert Howarth asserting that even in best case scenarios, LNG emissions are at least 24 percent worse than coal. This is a nonsensical one-liner: comprehensive, well-controlled (and peer-reviewed) studies show clearly that the climate damage associated with natural gas, including LNG, strongly depends on assumptions about how much methane leaks. The comparisons with coal also depend on many other variables, including the sulfur content of the coal (which creates polluting aerosols that mask warming), and the timeframe over which the comparison is made (shorter timeframes make methane look worse). And the letter fails to note that the much-higher CO2 emissions from coal burning create a legacy effect for future generations, while short-lived methane emissions do not.
Methane emissions are bad, but they are not "24 percent worse than coal" except when the calculations are done with assumptions that make them yield that answer. And this statement, which we can unfortunately expect to hear repeated ad infinitum, also fails to recognize the exhaustive efforts that the Biden administration is making to curtail methane leaks from fossil fuel infrastructure and landfills. The letter cites damaging methane leaks from LNG without noting that much of this problem is correctible with existing technology. So, in an effort to paint LNG in the worst possible light, the letter both ignores the administration's efforts and damages the perception of scientists as objective conveyers of data. For years scientists have correctly said that burning coal generates much more CO2 than natural gas, but might this letter mean that was wrong? I am not saying that scientists must refrain from policy advocacy, of course, but surely it is not too much to ask that they bring their full professional integrity to the effort. This letter fails that test.
Republicans, beholden as always to fossil fuel interests, are making dubious statements of their own. In remarks on the Senate floor, minority leader Mitch McConnell asserted that Biden's order to pause consideration of new export terminals would result in higher domestic energy prices. In fact, as pointed out by Andrew Dessler in The Climate Brink, the export of LNG (and other fossil fuels) creates higher domestic prices because it cuts the supply available for domestic uses. This effectively means that Americans pay the same high prices as Europe, instead of benefiting from the lower prices that should be a natural consequence of abundant domestic production. Dessler also correctly observes that the continued expansion of LNG creates long-lasting and unnecessary new infrastructure that will increase emissions in the long term.
Senator McConnell further suggested that limiting LNG exports will hurt European allies who no longer buy gas from Russia and thus have a greater reliance on the US. While there is no doubt that increased US exports helped Europe through this crisis, in a letter to President Biden 60 members of the European parliament urged him not to make Europe the excuse for continuing to increase LNG production. The lawmakers asserted that the immediate crisis has passed, and that Europe's need for US gas will soon decline as its increasing push toward renewables gains momentum. Moreover, a detailed analysis of long-term contracts with prospective buyers of LNG from export terminals still in construction shows that most of the gas is destined for commodity portfolio companies (which resell to the highest bidder). Only 18% is targeted to Europe, with 30% going to the Asia Pacific region. The shift to Europe as the major LNG destination was thus temporary, and the pre-war status quo is already reasserting itself.
Biden's decision to halt new LNG export terminal approvals was, at least in part, a political calculation forced on him by healthy climate advocates, whose support at the polls will be essential. But it is not clear that the decision will necessarily benefit Democrats. Republican pushback against the Inflation Reduction Act has been muted by the obvious benefits the law is having for growth and job creation in red states, but this decision allows for a more mainstream concern about the possibility of lost economic opportunity. Indeed, three days ago seven centrist Democrats and a dozen Republicans from the bipartisan Energy Export Caucus wrote to President Biden to voice concern over the decision, stating that US exports were essential to counter gas coming from Russia. Clearly, there is a possibility that the Biden pause will affect the voting in swing states like Pennsylvania, which is a major producer of fossil fuels.
The biggest issue, though, is what the heated Republican response to the pause shows about the threat they perceive to the continued dominance of fossil fuels. In another letter to the White House, the attorney generals of 23 Republican-led states baldly assert that the pause is unlawful, laying out a path for legal challenge which appears all but certain. And on Tuesday, the House Energy and Commerce committee held a contentious hearing in which the Republican Chair, Cathy McMorris Rogers of Washington, falsely called the action an outright ban. It bears repeating that the possibility for systematic denial of applications by DOE regulators concerned about climate change has clearly struck a nerve among Republicans and energy state Democrats. This issue is well worth following for what it reveals about what it will really take for the US to get serious about climate change.
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McKibben New Yorker article: https://www.newyorker.com/news/daily-comment/the-biden-administrations-next-big-climate-decision
Advocacy against CP2: https://www.stoplng.org
White House decision on CP2: https://www.nytimes.com/2024/01/24/climate/biden-lng-export-terminal-cp2.html
Biden statement on LNG pause: https://www.whitehouse.gov/briefing-room/statements-releases/2024/01/26/statement-from-president-joe-biden-on-decision-to-pause-pending-approvals-of-liquefied-natural-gas-exports/
Biden fact sheet on LNG pause: https://www.whitehouse.gov/briefing-room/statements-releases/2024/01/26/fact-sheet-biden-harris-administration-announces-temporary-pause-on-pending-approvals-of-liquefied-natural-gas-exports/
Pushback to White House decision on CP2: https://thehill.com/policy/energy-environment/4449329-democrats-join-gop-biden-pause-gas-exports/
Primer on fracking technology: https://www.nrdc.org/stories/fracking-101#what-is
FERC - LNG facilities: https://www.ferc.gov/media/us-lng-export-terminals-existing-approved-not-yet-built-and-proposed
Growth in US LNG exports: https://www.eia.gov/todayinenergy/detail.php?id=60361
US natural gas consumption: https://www.eia.gov/dnav/ng/hist/n9140us2A.htm
FERC reviews and climate change: https://insideclimatenews.org/news/02122022/ferc-liquefied-natural-gas-louisiana/
Countries with free trade agreements that are not subject to DOE's public interest test: https://www.energy.gov/sites/default/files/2022-08/ord4863.pdf
Legal and political analysis of DOE pause: https://www.akingump.com/en/insights/alerts/implications-of-us-department-of-energy-decision-to-pause-authorizations-of-liquefied-natural-gas-exports-may-extend-beyond-delays-to-pending-projects
Scientists' letter to President Biden: https://www.foodandwaterwatch.org/wp-content/uploads/2023/12/Scientists-CP2-Letter-Final.pdf
Coal vs gas emissions - https://iopscience.iop.org/article/10.1088/1748-9326/ace3db
Emissions from LNG industry expansion: https://iopscience.iop.org/article/10.1088/1748-9326/ac71ba/pdf
Biden administration methane curtailment plans: https://www.whitehouse.gov/wp-content/uploads/2022/11/US-Methane-Emissions-Reduction-Action-Plan-Update.pdf
Mitch McConnell statement on LNG pause:
Andrew Dessler's blog post: https://www.theclimatebrink.com/p/expanding-liquefied-natural-gas-a
EU lawmakers letter to Biden: https://thehill.com/policy/equilibrium-sustainability/4429396-eu-lawmakers-us-natural-gas-exports-biden-letter/
Analysis of forward LNG contracts: https://www.citizen.org/article/methane-madness-how-eight-pending-lng-export-projects-threaten-the-planet-and-how-president-biden-can-stop-them/
Democratic pushback to Biden pause: https://thehill.com/policy/energy-environment/4449329-democrats-join-gop-biden-pause-gas-exports/
Republican legal threats: https://d31hzlhk6di2h5.cloudfront.net/20240206/f2/e2/d4/fa/419cf99911a273689e2edeaa/LNG_Letter_Final_02-06-2024.pdf
House LNG export hearing: https://subscriber.politicopro.com/article/eenews/2024/02/07/partisan-war-of-words-during-house-lng-export-hearing-00139943
Couldn't agree more. McConnell's false statements about the LNG export pause hurting American consumers is just one more example showing how Republicans are puppets doing the bidding of fossil fuel companies.
Shortly after the Biden Administration announced the pause on reviewing new LNG terminals, the Washington Post ran a piece on a floating LNG terminal that BP is readying for operation off the coast of Senegal near its border with Mauritania. LNG projects are also coming on line soon in East Africa, off the coasts of Mozambique and Tanzania. I'd rather see these new market entrants have their turn to earn revenue from LNG royalties. https://www.washingtonpost.com/world/2024/01/31/senegal-natural-gas-climate-change/