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The US is the largest exporter of LNG. Brazil depends on imports for energy security. Russian influence is a topic of pending analysis.
The LNG export sector has been facing challenges in the United States, with the government recently announcing the temporary suspension of approval of new liquefied natural gas export projects. This measure has generated heated debates about the environmental impact and economic impact of this decision.
This suspension is directly linked to pressure from environmental groups, which influenced the Joe Biden administration to interrupt license analyzes for new LNG liquefaction plants. The decision by the Department of Energy (DoE) reflects concern about the impacts of the industry and the need to review approval processes, amid the presidential election race in 2024.
LNG Export: Temporary Pause and Careful Analysis
My Administration today [26/1] announces a temporary pause on pending decisions on LNG exports – with the exception of unforeseen and immediate national security emergencies. During this period, we will closely analyze the impacts of LNG exports on energy costs, and on energy security of America and in our technology. This pause in new LNG approvals sees the climate crisis for what it is: the existential threat of our time, the president said Joe Biden, in an official statement.
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The Rise of the United States as an LNG Exporter
The United States became the largest LNG exporter in the world in 2023, surpassing Qatar and Australia. They are Brazil's main suppliers and have positioned themselves as an important source of gas for Europe, as an alternative to Russian gas.
US LNG Export Capacity Growth
A forecast is for US LNG export capacity to grow from 84 million tons/year in 2023 to more than 181 million tons/year in 2030. This would represent almost 30% from global production de natural gas liquefied by the end of the decade, according to S&P Global Commodity Insights.
Environmental and Climate Impacts of LNG Export Projects
Environmentalists argue that continuing to allow the construction of large LNG export plants would harm climate goals of the Biden administration.
The suspension of new licenses, announced by the American government, marks an 'important turning point' in the fight against emissions and other environmental impacts of the gas industry in the USA, according to the environmental group Sierra Club.
Sierra Club Executive Director Ben Jealous questioned the public interest in the country's new liquefaction projects, adding that "the decision is a huge victory for communities and advocates who have long spoken out about the dangers of LNG and makes clear that the The Biden administration is hearing the calls to end America's dependence on dirty fossil fuels and ensure a livable future for us all.'
Industry Positioning and Influence on Gas Geopolitics
The American Petroleum Institute (API) issued a joint letter with other entities representing the sector warning of the effects of the measure. According to the local industry, the suspension could reinforce the Russian influence in gas geopolitics.
The letter highlights the critical role that continued U.S. LNG exports play in safeguarding national security, creating jobs, supporting European markets and contributing to global climate goals – when considering gas as a substitute for coal in local economy and in Asia.
Our nation's abundant supply of natural gas is an impactful geopolitical tool, helping to protect American consumers from growing global instability while advancing American national interests and ensuring the energy security of key U.S. allies, the groups said.
The letter cites that the Biden administration has already extended the LNG licensing process, from seven weeks to 11 months on average, and that any additional changes to export license approvals would represent an 'unnecessary addition to an already burdensome bureaucratic process' .
Source: EPBR
