On Friday, the White House slapped Texas with a “temporary pause on pending decisions of Liquified Natural Gas exports.”
This pause on new LNG export approvals is because the Biden administration sees “climate crisis for what it is: the existential threat of our time.”
Texas is the third largest exporter of LNG in the world. And it’s becoming quite apparent radicals in the Biden administration care very little about climate change but, instead, under that guise, are punishing Gov. Greg Abbott for defying the federal government over the border crisis.
Even Senate Energy Committee Chairman Joe Manchin (D-W.Va.), a top critic within the Democratic Party on energy policies, vowed an investigation into the export suspension.
In a statement on Friday, Manchin suggested the decision was based on political considerations instead of “indisputable facts”:
“I have always said that our first concern must be protecting American consumers and growing American businesses, and we need a safety valve in place to ensure Americans aren’t unnecessarily stuck paying a premium for the abundant resources we’re blessed to have.
“But as the superpower of the world, we also have a responsibility to our allies and trading partners who, in our absence, may have no other choice but to turn to countries that don’t share our values. That’s been made abundantly clear in the last two years as we have been able to step in to replace Russian natural gas to cut off funds for Putin’s bombs and bullets.”
Days after the decision, on Monday, Jack Fusco, CEO of Cheniere Energy Inc., was quoted at the Baker Hughes annual conference in Florence, Italy, via Bloomberg, saying that the Biden administration’s decision to pause approvals of LNG export licenses will be temporary:
“I’m hopeful that this will be behind us in November.”
Fusco pointed out that US LNG helps lower emissions from dirtier fossil fuel power generation, adding, “So I was very confused as to why that needs to be reanalyzed.”
Mike Sommers, president of the American Petroleum Institute, said the decision was “probably the worst energy decision that” Biden has made. He said, “Because of this pause, you’re probably going to see some investment that would have come to the United States, go elsewhere.”
The good news: Goldman Sachs analysts led by Samantha Dart penned a note Sunday, indicating:
Also on Friday, the White House confirmed the Department of Energy (DOE) will pause the approval process of proposed US LNG export facilities in order to incorporate a broader impact analysis. As we have discussed , this change in policy does not impact our outlook for US or global gas markets for at least another three years, given our base-cased export projects in the period have already been approved by the DOE.
Let’s hope the LNG pause is a short-term thing. Otherwise, severe supply constraints could emerge later this decade.