Biden pauses LNG export approvals after pressure from climate activists

FILE PHOTO: U.S. President Biden visits Louisiana
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By Timothy Gardner

WASHINGTON (Reuters) -U.S. President Joe Biden on Friday paused approvals for pending and future applications to export liquefied natural gas (LNG)from new projects, a move cheered by climate activists that could delay decisions on new plants until after the Nov. 5 election.

The Department of Energy (DOE) will conduct a review during the pause that will look at the economic and environmental impacts of projects seeking approval to export LNG to Europe and Asia where the fuel is in hot demand.

The review will take months and then will be open to public comment which will take more time, Energy Secretary Jennifer Granholm told reporters in a teleconference.

Biden said in a statement: "During this period, we will take a hard look at the impacts of LNG exports on energy costs, America's energy security, and our environment."

The pause "sees the climate crisis for what it is: the existential threat of our time," said Biden, a Democrat.

Administration officials vowed that the pause would not hurt allies, as it has an exemption for national security should they need more LNG.

Companies and countries in Europe rely on steady supplies of LNG from the U.S., which became world's top LNG exporter last year, as the region tries to wean itself off pipelined gas from Russia after its 2022 invasion of Ukraine. U.S. allies in Asia also covet LNG as they seek to slow coal consumption.

A spokesperson for the European Commission, noting the exemption for national security emergencies, told Reuters, "This pause will not have any short- to medium-term impacts on the EU's security of supply."

Karoline Leavitt, a campaign spokesperson for former President Donald Trump, a Republican, said the decision was "one more disastrous self-inflicted wound that will further undermine America’s economic and national security."

The last review of LNG export projects was in 2018 when export capacity was 4 billion cubic feet per day (bcfd). That capacity has tripled and is set to shoot higher by 2030 with projects under construction.

The growth has set off protests from environmentalists and youth groups, part of Biden's base. Activists say new LNG projects can harm local communities with pollution, lock in global reliance on fossil fuels for decades, and lead to emissions from burning gas and from leaks of the powerful greenhouse gas methane.

Environmentalists hailed the move and canceled sit-in protest planned at DOE headquarters next month.

"This is a milestone," said Roishetta Ozane, founder and director of The Vessel Project of Louisiana and a leading voice in the opposition to the LNG build-out, who said her family's health is affected by these terminals. "It sets the stage for potential rejections and slows down progress of these projects."

Michelle Weindling, political director of the youth-based Sunrise Movement said the pause would help Biden get support from young voters in November.

"It needs to be seen that leaders are leading boldly and unapologetically to solve this crisis," she said.

Swaths of U.S. industry, ranging from chemicals, steel, food and agriculture, also oppose unrestricted exports of U.S. gas, saying it raises risks for fuel prices and reliability.

Only four projects with export approvals pending at the DOE would be affected by the pause, an administration official said without naming them. The projects could include ones by Sempra Infrastructure, Commonwealth LNG and Energy Transfer, the DOE's website showed.

Sempra is confident its projects would help displace more carbon-intense fossil fuels, including coal, and provide gas to allies, a spokesperson said. The other companies did not immediately respond to requests for comment.

LOUISIANA PROJECT CP2

Upset with Biden's approvals last year of oil and gas projects in Alaska, climate activists have focused on stopping Venture Global's Calcasieu Pass 2 (CP2) pending LNG project in Louisiana, which would be the nation's largest.

CP2 first needs approval by the Federal Energy Regulatory Commission (FERC), which could consider it as soon as February, before its exports are considered by the DOE.

The DOE said the pause applies to all current and future pending applications until the review is complete. That means the pause could include projects like CP2 if approved by FERC, which only voted down an LNG project once, a move it later reversed.

An administration official said in the call that "projects like CP2 really speak to this question of are we over-building?"

A Venture Global spokesperson could not be immediately reached but the person said this week that a pause could send a "devastating signal to our allies that they can no longer rely on the United States." Germany accounts for nearly half of CP2's current contracted capacity of LNG.

(Reporting by Timothy Gardner; Additional reporting by Curtis Williams in Houston, Julia Payne in Brussels and Valerie Volcovici in Washington; Editing by Edwina Gibbs, Louise Heavens, Mark Porter and Marguerita Choy)