U.S. LNG exports expected to surge in 2025 despite the 2024 illegal ban on permitting new LNG export facilities
A Federal judge said, "the ban was illegal and implemented “completely without reason or logic and is the epiphany of ideocracy."
Chenier Energy’s Sabine Pass facility near the Texas/Louisiana border.
The U.S. Energy Information Administration, EIA, recently projected that U.S. LNG exports will increase by 15% in 2025 due to new capacity expansions coming online at two LNG plants, Plaquemines LNG and Corpus Christi LNG Stage 3. This will boost U.S. LNG capacity to almost 14 BCF/d in 2025 after remaining flat in 2024. U.S. LNG export capacity is on track to more than double by 2028:
It is important to note that this increase in LNG export capacity will occur despite the Biden Administration’s unsubstantiated and illegal ban on permitting new LNG facilities. The Biden Department of Energy issued the ban in January 2024, citing climate change concerns, but did not offer any supporting evidence, saying that a comprehensive study would be forthcoming.
In March 2024, Texas, Louisiana, and fourteen other states filed a lawsuit challenging Biden’s suspension of new licenses to export LNG. Texas Attorney General Ken Paxton said in a statement:
The ban will drive billions of dollars in investment away from Texas, hinder our ability to maximize revenue for public schools, force Texas producers to flare excess natural gas instead of taking it to market, and annihilate critical jobs.
A few months later, Judge James Cain Jr. of the Western District of Louisiana issued a preliminary injunction against the U.S. Department of Energy’s partial LNG export ban in a lawsuit filed by a coalition of states led by Louisiana and Texas, the Gulf states that lead the U.S. in LNG exports. Judge Cain said the ban was implemented “completely without reason or logic and is perhaps the epiphany of ideocracy” (emphasis added). Nevertheless, the LNG ban remained in place because DOE ignored the ruling.
On July 1, 2024, a federal judge ruled that the Biden administration’s ban on new exports of LNG was blocked following the challenge by more than a dozen states. The U.S. District Court for the Western District of Louisiana, Lake Charles Division, granted the multi-state coalition’s request for a preliminary injunction preventing the ban on new LNG export projects. DOE responded:
The U.S. Department of Energy disagrees with today's ruling. The Department continues to review the court's order and evaluate next steps.
On December 12, 2024, the Department of Justice (DOJ) moved to halt ongoing legal challenges against the Biden Administration’s ban on LNG export applications. The Justice Law Center said this about the DOJ ruling:
In a victory against government overreach and abuse of power, the Department of Justice has filed a motion to halt the legal challenges to the Biden Administration’s ban on the authorization of new and pending liquid natural gas (LNG) export applications. The Department has requested the court to stay the legal challenges because the incoming Trump Administration has indicated that it will overturn the ban after taking office, rendering legal challenges moot.
No federal officer or agency has the authority to enact a blanket ban on the approval of LNG export applications. The Biden Administration disregarded federal law and the Constitution by immediately and indefinitely halting the approval process,” said Loren Seehase, Senior Counsel at the Liberty Justice Center. We look forward to seeing this unconstitutional ban struck down—whether through the courts or by the incoming President—and see this as a major victory for the rule of law and for the tens of thousands of Americans across the country whose livelihoods rely on the oil and gas industry.
The DOE finally released their long-promised study of their LNG “pause” on December 17, 2024, which they claimed in a press release justified their pause of new LNG permits:
DOE analysis exposes a triple-cost increase to U.S. consumers from increasing LNG exports – the increasing domestic price of the natural gas itself, increases in electricity prices (natural gas being a key input in many U.S. power markets), and the increased costs for consumers from the pass-through of higher costs to U.S. manufacturers.
Special scrutiny needs to be applied toward very large LNG projects. An LNG project exporting 4 billion cubic feet per day – considering its direct life cycle emissions – would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023.
In the decade to come, we will see strong and mounting pressure within our democratic system to ensure that the United States uses its market position in a way that truly advances our national interest and energy security, which must include the needs of American workers, American families, and our responsibility to address the climate crisis. In our view, the question is not whether U.S. export policy will be forced to respond to those interests, but when and what that response is.
Secretary of Energy Jennifer Granholm said in her press release that the DOE study confirmed the pause on permitting new LNG projects was justified for five reasons:
First, the pace of growth of U.S. natural gas exports in recent years is truly astounding and many analysts say continued growth on this trajectory will quickly outpace global demand. Many analysts and 4 of 5 modeling scenarios say that the LNG projects that have already been approved are sufficient to meet global demand for U.S. LNG for decades to come.
Second, the U.S. Department of Energy’s updated study finds that a wide range of domestic consumers of natural gas–from households to farmers to heavy industry – would face higher prices from increased exports. The study put forward today finds that unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30%. Unconstrained exports of LNG would increase costs for the average American household by well over $100 more per year by 2050.
Third, LNG facilities tend to be concentrated in communities that are being asked to shoulder the additional burden of pollution from increased natural gas production and liquefaction. This comes on top of existing environmental burdens from refining, petrochemical, and other industries already concentrated near these communities. Pollutants such as methane, volatile organic compounds, particulate matter, nitrogen oxides, and others lead to higher mortality rates in communities where oil and gas are extracted and processed – a problem that, absent regulatory intervention, will only get worse, if volumes of LNG exports continue to dramatically increase.
Fourth, the climate impact of ever greater exports of LNG merits a close and rigorous focus, especially in a world that needs to quickly reduce greenhouse gas emissions substantially across the board to meet our global commitment of limiting warming to 1.5 C. While some tout LNG as a means to reduce the use of coal overseas (and to date that has been the case with some importing countries), the study put forward today shows a world in which additional U.S. LNG exports displace more renewables than coal globally.
Fifth, any sound and durable approach for considering additional authorizations should consider where those LNG exports are headed, and whether targeted guardrails may be utilized to protect the public interest. Over the past few years, U.S. LNG has proven critical for our allies in Europe as they wean themselves off Russian gas. However, European demand for natural gas has flattened and is set to decline substantially in line with Europe’s efforts to reduce its climate footprint. LNG demand has already peaked in Japan, and growth is expected to flatten in South Korea by 2030.
My take: The so-called January 2024 DOE “pause” on permitting new LNG projects was illegal, unjustified, and simply the whim of Energy Secretary Jennifer Granholm and John Podesta, who was flexing his newfound political muscles after he replaced John Kerry as the so-called “climate envoy.”
The illegal LNG permitting ban was part of the Biden administration’s war on fossil fuels, especially natural gas. Their plan was, no doubt, to make the LNG ban permanent after Biden was reelected, which they expected in January 2024. Instead, voters disapproved of such lawlessness and the energy policies of the Biden Administration and elected Donald J. Trump. President Trump will dispense with the LNG ban on January 20, 2025, when he signs what is rumored to be the first 150 Executive Orders.
Under President Trump and Energy Secretary Chris Wright, the U.S. LNG industry and all aspects of the U.S. oil and natural gas industry can get back on track, and the country can move forward without what has been a full-scale four-year war on U.S. energy.
The next four years will be exciting as energy sanity returns to the United States. The entire world will benefit from the unleashed U.S. energy industry, especially Europe and other countries that depend on U.S. LNG.
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