The energy crisis is forcing countries to make unprecedented decisions – although we are better off in the United States, imagine Russia’s neighbors – and in this context, the Biden administration has decided that this key fuel will stay within our borders and will not leave again until the situation improves.
An unprecedented energy crisis in the West: America and the EU take action
The US and Europe are facing unfolding challenges in the energy sector never seen before. Gas prices soared, more gas there are not, and the leaders are literally in trouble to face the extra shortage at this time.
Tensions brew, causing global distribution of natural gas to be of high importance and prompting America, the biggest natural gas producer, to bring its own exports up. On the other hand, in President Biden’s step backward, new liquefied natural gas (LNG) projects halted approvals.
Biden has issued orders to disable the processes in America that involve gas liquefaction for shipping. This cut targets a fill-in product pipeline that brings relief to the consumers already hit by a painful rise in gasoline prices and a steep increase in utility bills.
Biden announces unprecedented decision: this key fuel will not leave America
President Biden recently announced a temporary pause on approvals of new permits that would allow for increased exports of liquified natural gas (LNG) from the United States.
This action does not affect companies that already have export permits and are currently exporting LNG. Specifically, the Biden administration will not approve any new applications for permits to export additional LNG for a period of time while it conducts a broader review of the potential impacts of these projects.
The administration wants to assess how increased LNG exports could affect domestic energy prices and supplies. The pause only applies to pending applications for permits that have not yet been approved.
It does not revoke any existing permits that companies have already secured to export LNG from the U.S. This means LNG export facilities that are currently operating and shipping LNG abroad can continue doing so unaffected.
The volumes of LNG already approved for export are also unchanged by Biden’s action. The administration is merely halting any further expansion of LNG export capacity for now while it studies the issue.
The United States has every reason to “turn off the tap”, the same decision Russia took
President Biden made halting new LNG approvals a campaign promise in 2020. He pledged to limit permits for new infrastructure like pipelines and export terminals as part of his clean energy plan. This was in line with pressure from environmental groups that oppose further expansion of natural gas.
Groups like the Sierra Club have argued that building more infrastructure locks in the use of fossil fuels for decades when the US should be transitioning to 100% clean energy. They say approving LNG exports contradicts Biden’s climate goals and makes it harder to reduce emissions.
Biden issued the order halting approvals just ahead of his State of the Union speech, in which he reiterated how climate was a priority for his administration. Pausing new LNG permits lets him show progress on commitments to his base despite permitting still continuing for oil & gas drilling.
As you can see, the end of natural gas exports is a measure that has been welcomed in our country, but not so much in the rest of the West. The European Union relied on our promise to replace Russian fuel, and now, perhaps they will have to adapt to a new scenario. So an end to exports? We will see in a very short time, and we will find out.