White House gas export review to freeze new projects for more than a year

The review freezes the development of CP2, a mammoth export project that Venture Global LNG has been planning for coastal Louisiana. Environmental groups have called on the Biden administration to quash the project, which the say will lock in shipments of the fossil fuel for years and worsen climate change.

The United States is the world’s largest producer of natural gas, and its exports of the fuel have skyrocketed since the new wave of export terminals started coming online eight years ago. Now as the leading supplier of LNG, U.S. shipments helped Europe reduce its dependence on Russian supplies in the wake of Moscow’s invasion of Ukraine.

The administration is of the mind that “we have to take a breath,” said one of the people. “We’re already the world’s largest exporter and we’re going to double that. Let’s clear the decks a little bit.”

The decision to push approvals for any new LNG export permits past the November election may assuage environmental groups that have made U.S. exports of natural gas a new litmus test for Biden going into his reelection campaign. And despite the oil and gas industry’s heavy lobbying against any review, White House officials were confident that the moratorium on new export permits would not choke off U.S. natural gas shipments into the global market that is currently well supplied, and given that there are several U.S. projects already holding permits that are already under construction, the two people said.

The review would not interrupt the eight LNG export plants currently operating, the people said. Those plants ship 12 billion cubic feet of gas a day, about 10 percent of the country’s total gas production, according to the U.S. Energy Information Administration. Nor would the review impede the 10 projects that already hold DOE export permits and currently are currently under construction. Those new projects, once built, would double the amount of U.S. LNG going to market by 2028, EIA data shows.

Instead, the review would put a hold any new permits for an additional 10 projects that have applied for DOE permits but have not received them and whose backers have not made final investment decisions whether even to build the projects.

Energy Secretary Jennifer Granholm, White House clean energy advisor John Podesta, climate advisor Ali Zaidi and White House energy security advisor Amos Hochstein have helped craft the review’s language, the sources said. The review will look to update how DOE weighs climate change, environmental justice and domestic economic impacts when considering new applications to export LNG to countries with which the United States does not have a free trade agreement.

A spokesperson for Venture Global blasted the idea that the administration might put a moratorium on new permits.

“Such an action would shock the global energy market, having the impact of an economic sanction, and send a devastating signal to our allies that they can no longer rely on the United States,” VG spokesperson Shaylyn Hynes said in a statement.

A White House spokesperson declined to comment.