How Biden and Harris’ natural gas export policies could hurt the economy

The fundamental basis for the Biden-Harris approval pause related to liquefied natural gas export facilities has fallen apart in recent weeks, and now the administration’s apparent bias against natural gas appears to be impacting the financing decisions of U.S. export/import bank EXIM, as well.

The White House Decision to pause LNG was based on an inaccurate preview of an analysis by Robert Howarth, a Cornell University faculty member and a long-time critic of American natural gas and LNG. In a preview of his study published in January, Howarth originally said claims LNG’s life cycle emissions are between 24% and 247% higher than coal. But the final release of that study, released in September, found a claim of 33%, a fraction of the original range reported in the preview.

The data is now consistent demonstrated that natural gas and LNG are key to reducing both domestic and global emissions, a fact that has played an important role in helping the U.S. meet its CO2 reduction targets over the past two decades, as has been the case with a variety of coal-fired power plants Case was replaced by natural gas.

The LNG break

Making matters worse, allegations have recently emerged that the government may have concealed the fact that it did this already carried out The very environmental review it claimed in January had to be pursued by the Energy Department as justification for taking advantage of the permitting pause. Members of the House Oversight Committee sent a letter to Energy Secretary Jennifer Granholm last week requesting notices and documents related to a draft study her department said she conducted in 2023.

“In imposing its LNG ban, the Biden-Harris Administration cited the need for an updated study of the potential environmental, economic, energy security, national security and other impacts of additional LNG exports,” the lawmakers wrote. “However, the Committee has learned that a draft study may have been prepared as early as 2023 and that DOE has not provided this relevant information in response to both the Committee’s requests and interested parties’ requests under the Freedom of Information Act.”

The government has not received a response to the letter at this time and that is a mistake given that leaving the claim blank leads to the credible conclusion that the entire basis for the LNG pause was tenuous at best. If true, this is a poor way to make important policy decisions, and if incorrect, the public and industry need to be given a detailed explanation for it.

Why LNG is important in Mozambique

The appearance of political gamesmanship driving LNG export policy is compounded by EXIM’s five-year delay in financing a $4.6 billion investment in the Mozambique LNG project approved unanimously by its board in 2019. Located on the Afungi Peninsula in northern Mozambique, EXIM’s literature on LNG in Mozambique states that the project would create 16,400 American jobs over a five-year construction period.

Mozambique’s 13 million tonnes per year LNG capacity can play an important role in meeting demand in key markets while providing an alternative to sources exposed to geopolitical risks such as those in the Strait of Hormuz. Than China expands Given its influence in Africa through the Belt and Road Initiative, this U.S.-backed LNG project represents an opportunity for transparent, mutually beneficial investment without the dependency that often accompanies Chinese investment.

In 2022, President Biden launched the Partnership for Global Infrastructure (PGI) initiative, channeling billions into renewable projects while pushing traditional energy sources into the background. Pursuant to this policy, EXIM approved a $1.6 billion investment for Angola’s solar industry, but has yet to vote on natural gas infrastructure projects that could meaningfully expand reliable energy access across Africa. This calls into question EXIM’s compliance with Congress’s mandate to fairly evaluate all projects regardless of energy source.

The conclusion

Since the start of the Russia-Ukraine war, it has been clear that the US can either play a major role in global LNG development or be a secondary player, allowing rival countries like Qatar, Algeria and yes, Russia, to assert dominance. It is to his great honor that President Biden gave a clear signal to key European allies shortly after Russia’s invasion of Ukraine that America would be a leader and reliable partner under his administration.

Unfortunately, the approval pause has had the effect of slowing the expansion of the US industry and allowing these competitors to gain a foothold as dominant players in the market. It was a clear sign of a waning will that now appears to be affecting an already approved project that would strengthen American ties with another willing strategic partner on the east coast of the African continent.

At worst, this is a heavy-handed policy design with the country’s energy security in mind. At best, it’s just a lousy way to make important energy policy decisions. None of the options are particularly attractive.