Biden’s LNG limits could win votes but strain the energy sector
Moderates and conservatives worry about the long-term effect on jobs and prices
Sen. Joe Manchin, D-W.Va., criticized President Joe Biden’s pause on liquified natural gas exports in a hearing today before the U.S. Senate Energy and Natural Resources Committee. The order pauses new liquified natural gas (LNG) exports, which the president has lauded as an important step in addressing climate change. Critics argue the switch could stifle jobs and affect international relations, but voters motivated by climate change are celebrating. Their support could be crucial for Biden this election year.
“Again and again the White House has shown that it’s so concerned with indulging radical climate activists that it’s willing to play politics with our energy security and that of our allies,” Manchin said.
On Jan. 26, Biden ordered the Department of Energy to halt new LNG exports to countries to non–free trade agreement countries. The United States has free trade agreements with 20 countries, mostly in North and South America, the Middle East, and Asia. LNG exports to Europe ramped up after the war in Ukraine started, and today the United States supplies about 50 percent of the continent’s natural gas, according to the Center for Strategic and International Studies.
Biden’s order does not ban exports outright but limits the authorization of any new exports. The Biden administration says the United States can continue to meet Europe’s short- and medium-term needs without authorizing new LNG exports. It hopes the pause on export authorizations will limit byproducts like methane gas from being released into the atmosphere. But the move will also cut construction and operation jobs for planned export terminals, which has drawn congressional attention.
“The Biden administration definitely prioritizes climate stuff over almost anything else,” said Linnea Lueken, a research fellow on energy with the Heartland Institute, a conservative think tank. “It’s definitely the theme of this administration.”
A new study by the University of Colorado Boulder indicated that increasing concerns about climate change had a substantial effect on the results of the 2020 presidential election. November polling by Data for Progress found that 62 percent of voters under age 30 supported a pause on LNG, and the young voters were less opposed to pausing exports than older voters.
Climate activists argue that LNG releases methane gas into the atmosphere and carbon emissions from production and transportation.
“All throughout the cycle of gas use there is significant methane emissions and those emissions are known to contribute to global warming,” said Cathy Collentine, director of the Sierra Club’s Beyond Dirty Fuels campaign.
The Sierra Club endorsed Biden in 2020 and announced support for his reelection last summer. Collentine said Biden’s change shutters 12 planned export terminals awaiting construction approval. The Sierra Club estimated the terminals would have released annually roughly the same carbon emissions as 220 coal plants. The Biden administration said in a fact sheet the pause would reduce the “perilous impacts of methane on our planet.”
While it is extremely potent, conservatives like Lueken argue that methane is cleaner than carbon dioxide and far less prevalent in the atmosphere, only lasting for five to 10 years.
“They make a lot of hay about methane,” Lueken said. “But it’s not one of these things that's going to just pile up in the atmosphere and create huge amounts of warming.”
Climate activists have expressed sharp disappointment over some of Biden’s decisions as president, most significantly his approval of the Willow Project, which allowed new oil wells on public land. The Sierra Club blasted Biden last March for the decision.
“The harmful effects of President Biden’s decision cannot be overstated,” executive director Ben Jealous said in a statement. “[Biden] and his administration have made it almost impossible to achieve the climate goals they set for public lands.”
But now, they’re celebrating the pause on LNG exports.
“If we do not see these terminals move forward, that contribution to addressing the climate crisis is one of the most significant things that President Biden could do on climate.” Collentine said.
The League of Conservation Voters just announced a $2 million campaign to inform young voters about the export pause. The campaign videos say Biden has done more than any other president in history to “fight Big Oil.”
Lueken said that climate activists want more than just fewer exports. “Their ultimate goal is the ‘leave it in the ground’ idea,” Lueken said. “They don’t want new drilling.” The pause will ensure just that. If too much LNG is produced, it either has to be burnt off by flaring or stored until it can be used, but Lueken said existing storage capacity in underground tanks for LNG is already 60-70 percent full. “When your storage capacity is full and you can’t export, you have to stop drilling, otherwise prices start going nuts,” she said.
In the short term, both Lueken and Collentine said natural gas prices will likely decrease. This will also help Biden’s image among voters, many of whom have blamed him for high inflation, especially at the gas pump.
“I think the kind of cynical side of this move is that he can go on the campaign trail and say, ‘Look, natural gas prices have gone down,’ but it won't be forever,” Lueken said.
The LNG export industry alone adds $40 billion to $95.5 billion in value to the economy every year. When demand shrinks, small oil and gas businesses could struggle to secure loans, since investors more readily trust big companies to continue turning a profit. Lueken said the trickle-down effect over time will upset the stability of the industry. That’s where Biden may lose support.
Democratic Sens. Bob Casey and John Fetterman of Pennsylvania, expressed concerns about the thousands of jobs on the line in Pennsylvania’s energy industry. “If this decision puts Pennsylvania energy jobs at risk, we will push the Biden administration to reverse this decision,” they said in a statement last Thursday.
Other congressmen shared their concerns. “With Ohio’s 5th District being home to more than 86,000 manufacturing jobs, if we don’t have affordable energy, we cannot compete,” said Rep. Bob Latta, R-Ohio.