Members of the U.S. House of Representatives Climate and Energy Committee were split along party lines Tuesday over the Biden administration’s recent decision to halt modern export approvals for liquefied natural gas.
Republicans call hearing to challenge Energy Department decision ad last month that it will indefinitely suspend the issuance of modern LNG permits to non-FTA partners as it examines the impacts of LNG employ, including on climate change.
Republicans on the U.S. House Energy and Commerce Subcommittee on Energy, Climate and Grid Security criticized the decision Tuesday, saying it undermines the economic and environmental benefits of natural gas and hurts the United States on the global stage.
Democrats responded that it was the right time to overhaul an industry whose export potential has tripled in five years.
“Giving away to opponents”
The decision by President Joe Biden’s administration to sluggish U.S. exports will flood the market with energy products from hostile countries like Russia and Iran, said subcommittee chairman Jeff Duncan, a South Carolina Republican, amid growing global demand for LNG.
“The Biden administration’s energy policy is a handout to our adversaries,” he said.
Full committee Chairwoman Cathy McMorris Rodgers, a Washington Republican, said the industry employs hundreds of thousands of people and is responsible for billions of dollars in the economy.
“President Biden’s LNG export ban will end these benefits to local economies, destroy American jobs and raise energy prices,” she said.
Toby Z. Rice, president and CEO of natural gas producer EQT Corp., told the panel that he views the move as a ban, not a short-term pause. The policy would sluggish the industry, he said.
“I think this is a signal that will cool interest in investments,” he said.
Eric Cormier, senior vice president of the Southwest Louisiana Chamber Economic Development Alliance, said the industry slowdown will hurt other businesses, especially in the region that leads in LNG exports.
“When the administration announced its decision, my cellphone was ringing quite a bit,” he said. “Small-business owners were panicking.”
Cormier said his group “categorically disagrees” with the decision to suspend proceedings.
LNG supporters also argue that the product is cleaner than coal and other fossil fuels it could replace.
Rodgers said U.S. natural gas is 40% cleaner than that produced by Russia.
Time to “look closely”
Democrats argued it would be prudent to study the climate impact of LNG and described the pause as a relatively modest step that would allow for better analysis of the trade-offs associated with producing natural gas.
The Energy Department’s last updated analysis of LNG authorizations was in 2018, when the U.S. industry exported one-third of its current natural gas production capacity, said Colorado Democratic subcommittee member Diana DeGette.
The hold does not affect projects that have already been built or that have received Energy Department approval. It would not change the projection that LNG production will double again in the next 10 years, DeGette said.
“The fact that our country’s production has grown so rapidly must be taken into account, especially since the United States now has sufficient authorized production capacity to meet global energy demand in the short and medium term,” she said. “Continually increasing LNG exports without updating guidance to reflect new information is a fundamentally unserious proposition.”
DeGette said the break would allow the department to take a broader look at all the potential benefits and drawbacks of the modern proposals and better assess which projects “are truly in the public interest.”
“Looking ahead, because estimates show that exports could double, this is an opportune time for the administration to take a hard look at what the impacts are going to be,” said Kathy Castor, a Florida Democrat.
Gillian Giannetti, a senior attorney at the environmental group Natural Resources Defense Council, called the pause a “modest but important” step. She said it is consistent with a requirement under federal law that modern natural gas export approvals be allowed only if they are found to be in the public interest.
Debate on Russia
Duncan and Rodgers said the break would lend a hand Russian President Vladimir Putin, whose country is a leading producer of natural gas.
If the U.S. share of global supply declines, Russia’s gas economy could fill the gap, they say.
Even if Russia’s market share doesn’t boost, the global price impact of reduced U.S. supply could make Russian exports more valuable, allowing Putin to spend more money on his war effort against Ukraine, said Rep. Brett Guthrie, a Kentucky Republican.
Brigham McCown, director of the American Security Initiative at the conservative Hudson Institute think tank, agreed with that premise.
“The world is going to get its LNG from somewhere,” McCown said. “If not from us, then from other, less stable, less reliable partners like Russia.”
Democrats, however, questioned Republicans’ commitment to siding with Ukraine in the war with Russia.
Most Republicans on the panel opposed the Ukraine aid package when it came up for a vote, said Frank Pallone of New Jersey, the ranking member on the committee, a New Jersey Democrat.
DeGette noted that Republicans are scheduled to vote Tuesday afternoon on the aid package, which does not include funding for Ukraine.
Energy state Democrats are increasingly skeptical
While top Energy and Commerce Democrats praised the break Tuesday, it was not universally welcomed by all members of the party.
Pennsylvania U.S. Senators Bob Casey and John Fetterman, both Democrats, said in a statement last week that Pennsylvania is an “energy state” and said they were concerned about the effects of the outage.
“While the immediate impact on Pennsylvania remains unknown, we are concerned about the long-term impact this outage will have on thousands of natural gas jobs in Pennsylvania,” they said. “If this decision puts Pennsylvania energy jobs at risk, we will press the Biden Administration to reverse this decision.”
West Virginia Democratic Sen. Joe Manchin III, a longtime fossil fuel advocate who is reportedly considering a presidential run as an independent with a centrist agenda, sharply criticized the decision and scheduled a hearing for later this week to explore the issue.
