‘We all just won’: U.S. to apply climate test to new LNG terminals

The Biden administration's climate test on new LNG terminals would be “the biggest thing a U.S. president has ever done to stand up to the fossil fuel industry,” writes veteran climate author Bill McKibben. Freeport LNG photo.

This article was published by The Energy Mix on Jan. 25, 2024.

By Mitchell Beer

The Biden administration is preparing to apply a climate test to a proposal for a massive liquefied natural gas (LNG) terminal in Louisiana, one of 17 the U.S. fossil industry is pushing forward for approval, the New York Times reported this afternoon.

The decision to pause the approval process, which could extend regulatory review for the Calcasieu Pass 2 (CP2) project beyond the November general election in the United States, would be “the biggest thing a U.S. president has ever done to stand up to the fossil fuel industry,” writes veteran climate author Bill McKibben, founder of the Third Act climate justice group, in his The Crucial Years newsletter.

McKibben’s headline for his post: “Um, I think we all just won.”

Citing three independent sources, the Times says the pause could “spell trouble” for CP2 and the 16 other export terminals coming up behind it. The country is already the world leader in both LNG exports and oil and gas extraction, with seven export terminals in operation and another five under construction.

The U.S. Department of Energy “has never rejected a proposed natural gas project because of its expected environmental impact,” the Times reports. But now, the White House is directing DoE “to expand its evaluation of the project to consider its impact on climate change, as well as the economy and national security.”

Today’s announcement “comes as Mr. Biden gears up for what is likely to be a contentious re-election campaign,” the Times writes. “He is courting climate voters, particularly the young activists who helped him win election in 2020 and who have been angered by his administration’s approval last year of the Willow project, an enormous oil drilling operation in Alaska.”

By contrast, likely Republican presidential nominee Donald Trump is promising to expand fossil fuel production and shred Biden’s climate agenda if he regains the White House. In his first term, Trump “pulled the U.S. out of the Paris climate agreement, staffed his environmental agencies with fossil fuel lobbyists, and claimed—against all scientific evidence—that the Earth’s rising temperatures will ‘start getting cooler’,” Politico wrote earlier this year. “Expect a second Trump presidency to show less restraint.”

Senate Republicans immediately scorched today’s White House announcement. “This move would amount to a functional ban on new LNG export permits,” said Senate Minority Leader Mitch McConnell (R-KY). “The administration’s war on affordable domestic energy has been bad news for American workers and consumers alike.”

McKibben interprets that outburst as evidence that the Times story is correct—and takes McConnell to task for getting his facts wrong. “Exporting natural gas of course drives the price up for American consumers,” McKibben writes. “That’s how economics work—so Biden’s stand is an actual live inflation reduction act.”

In an email cited by McKibben, veteran U.S. energy analyst Jeremy Symons said that within the White House, “there is little division over the decision to delay CP2, in part because it is not seen as a major energy security issue, said people familiar with the discussion. That’s because the United States is already producing and exporting so much gas. That capacity is set to nearly double over the next four years, making the need for CP2 less urgent.”

But even so, today’s news “is a sea change in how the administration has viewed LNG,” Symons wrote. “It is not by any means a final victory, but we KNOW that the facts will win the day when given a fair hearing. We have never had a fair hearing, until now.”

One of those facts, McKibben adds, is that the world is currently “awash with cheap gas”. The gas lobby in the U.S., Canada, and elsewhere has been pushing hard to increase exports to Europe in the wake of Russia’s war in Ukraine, and Europe has expanded its LNG import capacity since early 2022.

“But much of that new infrastructure may prove unnecessary as European gas consumption declines,” Yale Environment 360 wrote last fall, citing data from the Institute for Energy Economics and Financial Analysis. “Europe’s recent efforts to build out renewables and curb gas consumption are paying off. After a surge in imported LNG in 2022, it has seen imports flatten out this year.”

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