The Biden administration is under increasing pressure regarding the approval of a major liquefied natural gas (LNG) export project in Louisiana.
The Federal Energy Regulatory Commission (FERC) is expected to decide on the Venture Global’s Calcasieu Pass 2 (CP2) LNG terminal in the coming weeks or months, a project that environmentalists argue would undermine U.S. climate goals but business interests claim is crucial for global energy security, Reuters reports.
CP2, proposed by Venture Global, is set to be twice the size of the existing CP plant, boasting an export capacity of 20 million metric tonnes per year.
FERC, an independent entity within the Department of Energy (DOE), granted final environmental approval for CP2 in July 2023. However, the Biden administration is reportedly considering a more stringent review process for LNG export permits, potentially including criteria related to the environmental impact on climate change.
U.S. energy law mandates FERC to approve LNG projects unless they are deemed contrary to “the public interest.” Unlike other sectors, FERC is not explicitly required to factor in climate implications. Historically, FERC has rarely denied LNG projects.
However, CP2 requires approval from the DOE to export LNG to countries lacking a free trade agreement with the U.S. This includes nations in Europe and Asia. The DOE has not provided updates on its approval process.
Thus, discussions within the Biden administration suggest a possible moratorium on LNG export permits until a comprehensive environmental review is finalized. This review may include considerations of the project’s impact on climate change.
Notable environmentalists, such as Bill McKibben, view the approval of CP2 as a significant misstep. They argue that the project would release more greenhouse gases than other approved ventures, heightening concerns about its climate impact.
Business groups in Asia and Europe are urging the administration to approve LNG projects. These groups argue that LNG helps Asian countries transition away from coal, and European entities express concerns about the commitment to maintaining a stable supply.
The Biden administration faces a delicate balancing act between environmental concerns and economic interests. With the upcoming U.S. elections on November 5, political considerations may influence the decision on LNG export permits.
Analysts from the Rapidan Energy Group say the administration, under pressure from both environmentalists and business interests, is unlikely to issue new export licenses before the elections.
