US pauses approval of new natural gas export terminals due to pressure from environmentalists

President Joe Biden’s decision to halt new terminals for the export of liquefied natural gas (LNG) has caused anger in the industry and among the Republican opposition, but also joy among environmentalists fighting against climate change. The White House has paused permits for new exports of LNG to countries with which Washington does not have a free trade agreement, which in practice leaves 17 infrastructure projects on hold. Among them is Calcasieu Pass 2 in Louisiana, which was going to be the largest export terminal in the world and comes with a price tag of $10 billion. This project had triggered strong criticism from environmental organizations about its potential impact.

The U.S. government claims the measure is necessary so that the Department of Energy can evaluate and update the effects of LNG on the market, on the climate, and on energy security. The data in its power is, for the most part, from five years ago, when the industry was still in its infancy in the U.S.

The U.S. is currently the main LNG exporter in the world, after surpassing giants such as Australia and Qatar last year: in 2023 it exported 88.9 million metric tons, 14.7% more than the previous year, according to data from the London Stock Exchange Group. The European energy crisis caused by the outbreak of war in Ukraine and the suspension of gas supplies from Russia, which increased the demand for this type of gas by 60% in Europe, gave a powerful boost to a sector that plans to double its export capacity before the end of the current decade, once the construction of five large ongoing projects is completed.

But with the growing success, scrutiny has also increased. Environmental organizations consider that the boom in exports is incompatible with compliance with U.S. climate commitments. They allege that LNG sales perpetuate the use of fossil fuels, rather than encouraging the use of renewable energy. And there is the risk of making big investments for export volumes that may not have a continuity over time.

Although natural gas is cleaner than other hydrocarbons, it still emits significant amounts of carbon dioxide when it burns, environmental organizations point out. The main component of this fuel, methane, traps more heat than CO₂ when it is released into the atmosphere.

In November, pressure from these groups and from public opinion led more than 60 lawmakers to demand changes to the way the Department of Energy grants permits.

In a statement announcing the new measure on January 26, Biden said that “during this stage we will critically examine the effects of LNG exports on energy costs, the energy security of the United States, and our environment.”

The moratorium includes an exception for “unanticipated and immediate national security emergencies.” It will also not affect export projects already underway or those that are under construction. But those pending permits, a total of 17, will be on hold indefinitely, probably until 2025, once the presidential election has passed.

The announcement comes just a month after COP28, the U.N. meeting on climate change held in Dubai, in which the nearly 200 participating countries, including the United States, committed to embarking on the path to definitively leave fossil fuels behind.

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