Biden's team may undermine Trump's intentions to increase US gas exports
Photo: The United States is the world's largest exporter of LNG (Getty Images)
The US Department of Energy has conducted a study on the feasibility of liquefied natural gas exports. The report may undermine US President-elect Donald Trump's plans to immediately issue permits for billions of dollars worth of LNG export facilities, according to The Washington Post.
Nature of the conflict
Liquefied natural gas (LNG) is a form of natural gas that has been cooled to a liquid state, making it easy to store or ship abroad in specially designed tankers.
The United States is the world's largest exporter of LNG, and its supplies played a crucial role in freeing European countries from their dependence on Russian gas at the beginning of the war in Ukraine.
A study conducted by the Department of Energy's National Laboratories showed that allowing further LNG exports from the United States would result in an additional 1.5 gigatons of greenhouse gases being released into the atmosphere by 2050. This increase is equivalent to about a quarter of the country's total annual emissions.
In January, the Joe Biden administration suspended approval of LNG export projects to study their impact on climate change, the economy, and national security. Trump instead vowed to end the pause on his first day back in the White House, saying it had stifled investment and jobs in the domestic gas industry.
The Trump administration is expected to refute the study and replace it with more favorable conclusions for the industry. But this process could take "anywhere from several months to several calendar quarters,” analysts at ClearView Energy Partners wrote in a recent note to clients.
Biden's team's position
The analysis also found that sending more gas abroad would leave less gas available for the United States, which would raise wholesale domestic natural gas prices by about 31 percent. This would increase energy costs for US consumers by more than $100 a year by 2050.
“For those who are really in challenging financial situations, $100 per year is a big deal,” said a senior Biden administration official, speaking on condition of anonymity.
The study found that already-approved gas projects will meet global LNG demand by 2050. Most of the new demand will come from China, a global adversary of the United States, the study said.
Risks for business and economy
However, if the United States stops approving new LNG projects, other competitors, such as Qatar and Canada, could increase their exports, according to Pulitzer Prize-winning energy expert Daniel Yergin.
Energy executive Chris Wright, Trump's pick to head the Department of Energy, argues that US gas exports provide other countries with an alternative to coal, a dirtier fossil fuel.
“Think of the climate movement — this is what they want, right? You want to displace coal with natural gas if you want to lower not just pollutants but greenhouse gases. And this is going to slow that a bit.,” Wright said in an interview with CNBC.
Trump is preparing a large-scale plan to increase gas exports and oil production. Oil and gas production will be, along with immigration, one of the early items on the newly elected US president's agenda.
