In January, the Biden administration ordered a pause on approvals for new LNG export facilities, spurring political maneuvers and legal challenges against the decision. (Source: Shutterstock)
The White House’s pause on new LNG export permits remains in place, although political maneuvering and legal challenges against the decision continue apace.
In the last three weeks, an end of the pause was pitched as part of a budget deal to send military aid to Ukraine, while 16 states joined in a federal lawsuit seeking a ruling against the Biden administration’s hold on permits.
A study by Arbo, a firm tracking energy regulation, stated the actions showed the dispute over the LNG pause has moved onto the next phase as business and political opponents of the measure take concrete actions against it.
In January, the Biden administration ordered a pause on approvals for new LNG export facilities until the Department of Energy could complete a study on the effects of projects on climate change. Climate activists supported the election-year move. Supporters of the industry said it would harm LNG projects currently underway and make the industry look less dependable to potential customers and investors.
In Washington, the pause has been a political football. On April 2, Reuters reported that two White House officials were open to ending the LNG pause as part of a deal to get Congressional approval for a Ukraine military aid package. After Reuters made the report, the White House released a statement calling it “not true” and re-affirming the original decision.
Outside of D.C., the LNG policy is receiving legal attention.
Attorney generals from 16 states, led by Texas and Louisiana, filed a lawsuit against the federal government on March 21. The suit says the government does not have the authority to deny the LNG export permits to the entire industry at once.
“The Biden administration is hijacking the global energy supply chain to the detriment of Louisiana, our nation, international stability and developing democracies abroad,” said Liz Murrill, Louisiana attorney general, in a statement after filing the suit.
According to the Arbo study, the lawsuit does have some similarities with an earlier suit on energy policy brought against the White House. One major difference, however, is the general belief that the LNG pause is primarily an election-year move. U.S. Energy Secretary Jennifer Granholm has said that the pause would be in the “rearview mirror” within a year.
“The LNG pause duration was only going to be until after the election—not permanent. And so, the lawsuits would ultimately fade away, when export authorization resumes,” Arbo’s Carey Perlozzo, vice president for marketing and customer operations, said in an email.
In 2021, the Biden administration suspended new offshore oil and gas leases in the Gulf of Mexico and the West Coast. All of the states that signed on to the suit against the LNG pause also joined the coalition against the offshore policy, with the exception of Missouri.
The states ultimately won the suit in the same Louisiana federal court where the LNG case was filed.
Chief Judge Terry A. Doughty, who retains his position in the Western District of Louisiana’s federal court, said in his ruling that the government, rather than doing a comprehensive review while the scheduled oil and gas lease sales took place, “put the cart before the horse.”
The case has some parallels with the suit against the LNG pause, but there are some differences, Arbo pointed out. The DOE requires a “public interest” examination for LNG facilities, guided by a 2018 study. The pause was implemented to update the study.
In 2021, the Biden administration halted offshore leases through an executive order and specifically stated the move was to fight climate change.
The federal procedures at issue in the lawsuits are also different.
The process for offshore oil and gas leasing is a structured, four-step process laid out in the Outer Continental Shelf Lands Act. The LNG permitting process is much less specific. The procedure mandates that the energy secretary issue an export license unless, after a public hearing, the secretary believes the facility “will not be consistent with the public interest.”
However, as the makeup of the court includes former president Trump nominees Doughty and presiding judge James D Cain, Jr., “there is a good chance that the court could see no reason why DOE could not continue to process applications under the old study while it commissions a new one,” Arbo wrote in the study.
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