The Biden administration’s recent decision to halt approvals for new natural gas export projects has sparked a debate among energy analysts about its potential impact on global gas supply and climate change.
Announced last Friday, the pause is intended to re-evaluate the projects based on new climate and other criteria.
Biden’s pause on LNG exports affects specific projects, climate impact uncertain
The pause is expected to directly affect four specific projects, two large and two small, but won’t impact existing or ongoing liquefied natural gas (LNG) exports.
President Biden described this move as a chance to assess LNG exports’ effects on energy costs, America’s energy security, and the environment.
He emphasized the action as a response to the climate crisis, which he called “the existential threat of our time.”
Analysts from The Hill suggest that the pause may not significantly affect climate or energy markets in the short term.
Experts analyze short-term and long-term impacts of Biden’s export pause on gas
Joseph Majkut, director of the energy security and climate change program at the Center for Strategic and International Studies, noted that the existing export capacity could absorb the immediate effects.
However, long-term impacts are contingent on the duration of the pause.
Analysts at Wood Mackenzie pointed out that investment delays of 18-24 months might be manageable, but prolonged uncertainties could jeopardize gas’s role in the energy transition.
Uncertainty around pause’s duration and outcomes
The pause duration remains unclear, with officials indicating that revising the assessment process could take several months, followed by a comment period before implementing any changes.
The eventual outcomes, such as stricter climate safeguards or potential project rejections, are also uncertain.
Majkut highlighted that the Energy Department’s decisions on approving LNG facilities will be crucial in determining climate and geopolitical impacts.
He advocated for operating existing and future LNG facilities under optimal conditions to minimize climate impact.
Risks of blocking gas exports and global energy transition
Doug Vine, director of energy analysis at the Center for Climate and Energy Solutions, echoed this sentiment, stating that making U.S.-produced gas cleaner would significantly benefit the climate.
However, analysts warned of the risks associated with outright blocking gas export projects.
Majkut mentioned that such actions could reduce the competitiveness of the U.S. LNG industry against global players like Qatar and Russia.
Moreover, denying access to U.S.-produced gas might prolong some countries’ reliance on coal, which is more harmful to the climate than gas.
Debate over Biden’s gas export review’s impact
Ademiju Allen, a senior analyst at Rystad Energy, expressed concerns that prolonged limitations on LNG exports could slow down the global energy transition.
He noted the likelihood of a shift towards coal rather than renewables due to its lower international cost.
While the Biden administration’s pause on gas export projects aims to align with climate objectives, its impacts on the global energy landscape and climate change mitigation remain a topic of intricate debate among experts.
The decisions made in the coming months will be critical in shaping the future of energy and environmental policy.