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The chief executive of the US’ largest natural gas producer says he is “in disbelief” at the government pause on authorisations for LNG export facilities, despite projections from industry experts that the country could triple exports even without new infrastructure. 

The Biden Administration announced on January 26 it would temporarily halt authorisations of new LNG exports to countries that do not have a free trade agreement (FTA) with the US. Existing export facilities and those already approved are not affected. 

Under the US Natural Gas Act, exports of liquefied natural gas to non-FTA countries can only be approved if they are deemed in the public interest, and the White House says the economic and environmental analyses underpinning those decisions have become outdated. 

But speaking at a US House of Representatives subcommittee hearing on February 6, Toby Rice, president and chief executive of gas giant EQT, said the announcement “has sent shockwaves across both sides of the Capitol and both sides of the aisle”. 

“Let’s call this what it is. The Biden Administration’s decision was pure politics,” he told lawmakers. 

“The moratorium was made under the guise of updated research and a claim that we needed updated studies on the environmental and economic impact of US LNG, but we all know what it really is, and that’s an election year stall designed to garner votes.” 

Rice argued that by displacing coal, natural gas has “single-handedly contributed to over 6% of the emissions reduction in the United States since the turn of century”. 

EQT alone has already cut methane intensity by around 70% and is on course to achieve net-zero scope 1 and 2 emissions by the end of this year, he said. 

Rice added that US exports have “literally kept the lights on in Europe” following Russia’s war in Ukraine. Russia has historically been the largest supplier of gas to the continent, but sanctions introduced following the invasion in 2022 prompted a scramble to secure energy supplies from elsewhere. 

Last year, US exports of LNG rose by around 13%, Kpler data shows, making the country the world’s top exporter of LNG for the first time, ahead of previous leaders Australia and Qatar. Around two-thirds of shipments were to Europe. 

“I’d just like to talk about how big this opportunity is,” Rice told the subcommittee hearing. “We have a resource that would allow us to be able to support quadrupling our LNG exports to around 60 [billion cubic feet] a day. 

“The United States has the opportunity to essentially add a net Saudi Arabia of clean energy to the world stage. Think about the amount of peace, prosperity and influence that can bring from America to the world.” 

His arguments echo claims from Shell’s chief executive Wael Sawan, who told the Financial Times on February 4 that Biden’s move “erodes confidence” in the long-term viability of the LNG industry. 

The House Committee of Energy and Commerce, a US congressional committee, described the decision as an “export ban” that has “already disrupted global energy markets and discouraged our allies in Europe”. 

 

Common sense 

However, those claims have been given short shrift by legal experts and energy campaigners. 

Speaking at the same hearing, Gillian Giannetti, senior attorney at the National Resources Defense Council – a membership group comprising activists, scientists and environmental specialists – described the pause as “a common sense move”. 

Giannetti said the US is “on track to double our exports by 2027 and triple into the early parts of the 2030s without any new authorisations”. 

She added exports are already meeting demand in Europe, noting that Europe’s gas storage is currently at a historically high level of 96%. 

Assessment for whether infrastructure developments are in line with public interest are based on guidelines introduced four decades ago, Giannetti said, meaning the process “is like trying to stream Netflix over a Betamax”. 

As LNG facilities have a long lifespan, building new infrastructure into the 2030s creates a “high risk of stranded assets”, she argued. 

And methane emissions from leaks, as well as carbon emissions from transportation, liquefaction, regasification and burning, still have “an extremely powerful [greenhouse gas] impact”, the lawyer said. 

The International Energy Agency has long called for an immediate halt to all new fossil fuel projects, pointing out in May 2021 that the energy industry must focus solely on output and reducing emissions from existing assets in order to have any chance of keeping global warming below 1.5°C. 

Campaign group Oil Change International has also welcomed Biden’s decision, describing it as “one of the most significant actions ever taken by a US president to stop the dangerous expansion of fossil fuels”. 

The US election will not take place until November this year, but moves are already underway to challenge the pause on LNG permits. 

The Independent Petroleum Association of America says it is urging US lawmakers “to take immediate legislative action to counter” the decision. 

“We urge leadership in the House and Senate to move to expedite passage of this legislation through any legislative vehicle possible,” the association said in an open letter published on January 31, co-signed by several other energy industry groups.