Biden halts new LNG export permits to reassess environmental and economic impact
12:18 AM EST, January 27, 2024
President Biden expressed on the White House's website that from the commencement of his administration, "We have embarked the United States on an unmatched journey to combat the domestic and international climate crisis - securing the largest ever global investment in climate change, fostering revolutionary discoveries in clean energy to stimulate a green economy and create numerous jobs, endorsing environmental justice for all, and rallying world leaders to detach from fossil fuels that pose a threat to our planet and people."
The President believes that additional measures are required.
"Today, my administration is introducing a temporary cessation in approving the export of liquefied natural gas, barring unforeseen crisis situations related to national security. During this time, we will scrutinize the effect of LNG exports on energy prices, U.S. energy security, and our environment," stated the U.S. President.
The U.S. emerges as an alternative
"On one side, we should consider the assurance of supplies to the global market, and on the other, we should meet climate goals. The U.S. seriously addresses climate issues but also acts prudently in economic terms. After the eruption of the war in Ukraine, the U.S. became a crucial ally for those nations seeking alternatives to Russian gas," Kardaś commented.
"Biden fully recognizes that he cannot entirely undermine the sector that many U.S. companies rely on. The gas industry in the U.S. wields considerable influence, which makes the White House's daring move even more admirable," he added.
Linda Kalcher, Executive Director of think-tank Strategic Perspectives, noted that the European Union has already commenced its withdrawal from gas.
"Our analysis reveals that by 2030, the bloc will reduce its demand for oil and gas by one-third, and gas can be effectively eliminated by 2040. LNG prices are volatile and much higher than pipeline gas prices. European governments and corporations are significantly amplifying the scope of renewable energy solutions, as these are economically and energy secure optimal choices," she stated.
Massive investments may not turn profitable
"According to the International Energy Agency (IEA), two-thirds of all ongoing LNG export projects may not recover their initial capital investments. About the United States, this projection indicates that planned investments in gas liquefaction worth approximately $40 billion may be unprofitable," warned Robert Rozansky, a Global LNG Analyst at the Global Energy Monitor.
Recent data from European economic think tank Bruegel indicates a decrease in demand for natural gas in the European Union. The demand in 2023 (January-November) was 19% lower than the average in 2019-21.
