U.S. breaks promise to supply Europe with LNG citing concerns about climate

Robert Bryce's "Iron Law of Electricity" says the decision will backfire.

LNG tanker docked at Chenier’s Sabine Pass LNG Terminal. Photo courtesy of Karen Warren, Houston Chronicle/Staff photographer

On Wednesday, January 24, 2024, the Biden administration announced it was immediately halting the permitting of new U.S. LNG terminals. This comes after President Biden promised Europe on March 25, 2022, that the U.S. LNG industry would supply at least 15 billion cubic meters (BCM) of LNG to Europe for the remainder of that year and would increase the supply to 50 BCM through 2030. The pledge was made to help Europe replace at least one-third of its gas imports from Russia in 2021. E&E News reported at the time (emphasis added):

The White House announced this morning that the U.S. will rapidly increase exports of liquefied natural gas to Europe as Germany and other E.U. nations try to diminish their dependence on Russian fossil fuels.

The move will ramp up LNG shipments carried by seagoing tankers by 15 billion cubic meters this year, according to a fact sheet released by the White House. As a comparison, the United States sent 22 bcm of LNG to Europe last year, the highest ever traded between the two continents.

The White House said American exports of LNG will continue to grow through 2030, by which time the U.S. plans to be sending 50 billion cubic meters of gas to Europe annually.

“This build-out will occur in a way that is consistent with, not in conflict with, the net-zero climate goal that we’re shooting for,” Biden said during a meeting with European officials in Brussels this morning. He called the effort a “catalyst” for doubling down on investments in clean energy.

Biden made that promise without consulting with the U.S. LNG industry, which was surprised by Biden’s announcement. When Charif Souki, a pioneer of the U.S. LNG export industry and currently head of LNG developer Tellurian, heard the commitment Biden had made in 2022, he said:

I have no idea how they are going to do this, but I don't want to criticize them, because for the first time they are trying to do the right thing. The question now is how will the U.S. government, in a free market, direct commercially independent companies to ship LNG to Europe?

The U.S. LNG industry did not have to be “directed” to export more LNG but rather immediately rose to the challenge and committed billions of dollars to build new export facilities.

Instead of acknowledging the U.S. LNG industry for its efforts to be a “catalyst for doubling down on investments in clean energy,” the Biden administration just announced that it would reverse its policies and punish it, which will result in billions of dollars in losses for domestic LNG companies to appease the radical anti-fossil fuel NGOs.

The decision resulted from pressure from anti-fossil fuel NGOs, which were outraged that the Bidens had approved the construction of new LNG facilities. They hate natural gas and LNG because they say the methane released by LNG tankers contributes to global warming.

European energy companies were shocked and alarmed by the Biden administration’s announcement that the U.S. was backing away from its promise to supply Europe with LNG until at least 2030. Eurogas, which represents dozens of energy companies operating in Europe, issued a statement calling the halt in LNG permitting “alarming” and potentially threatening their efforts to reduce dependence on Russian gas following its invasion of Ukraine.

Earlier this month, the Asia Natural Gas and Energy Association told Energy Secretary Jennifer Granholm that without additional U.S. LNG, Asian nations would be forced to turn back to buying natural gas from Russia. Payl Everingham, CEO of the association, said:

In my conversations with leaders across the Asia-Pacific region, there are significant concerns about the commitment of trusted energy supplier nations such as the U.S.

The reality is that the so-called “environmental lobby” has been outraged by the number of new LNG terminals approved by the Biden administration in recent years. The Houston Chronicle reported that a massive LNG export terminal being developed by Virginia-based Venture Global on the Louisiana Gulf Coast had angered the environmental lobby. Named CP2, the terminal will have a capacity of 4 billion cubic feet of gas per day, which would put its greenhouse gas emissions far above that of Conoco Phillips' controversial Willow project in Alaska, Bill McKibben, head of the activist group Third Act, published an op-ed last month:

More than 200 nations pledged last week in Dubai that they would be “transitioning away from fossil fuels”. Some cheered and some scoffed; we’ll soon know if the world’s biggest producer of oil and gas – the United States – meant what it signed, or if it was just more (literal) hot air.

That’s because the US Department of Energy (DOE) must decide whether to stop rubber-stamping the single biggest fossil-fuel expansion on earth, the buildout of natural gas exports from the Gulf of Mexico. So far, they have granted every export license anyone has requested, and as a result the US has become the biggest gas exporter on planet earth. If they keep it up, the veteran energy analyst Jeremy Symons says that before long US liquefied natural gas exports will produce more greenhouse gases than everything that happens on the continent of Europe.

McKibben went on to say:

When you live on a planet where the cheapest way to produce power is pointing a sheet of glass at the sun, filling a tanker with liquefied natural gas and shipping it halfway around the world is archaic. It’s also ruinous: new data from the Cornell scientist Bob Howarth this fall showed that these ships leak so much methane that it’s far worse for the climate even than exporting coal.

My Take: Anyone who says that electricity can be produced by “pointing a sheet of glass at the sun” cannot be taken seriously. Bill McKibben and people like him think that Americans are mindless sheep who will believe anything he and his counterparts say.

More importantly, the Biden administration and the U.S. “climate” lobby ignore what Robert Bryce calls the “iron law of electricity,” which says that “people, businesses, and governments will do whatever they have to do to get the electricity they need.” That will most likely be Russian natural gas, which will help finance their invasion of Ukraine. Worse still, they will resort to burning coal.

It is evident that the U.S. climate NGOs do not care about CO2 emissions; they hate the U.S. fossil fuel industry and want to destroy it, regardless of lost human lives or the environment. They could care less about the welfare of Europeans or anyone else on earth. Their only goal is to punish and ultimately obliterate the U.S. fossil fuel industry.

The fact that the Biden administration is willing to risk the welfare and lives of Europeans who took President Biden at his word is a sad and concerning commentary that further damages the reputation of the U.S. in the world and sets the stage for Europe and other countries to look elsewhere for their LNG or give up on it altogether and revert to burning coal.

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