WASHINGTON: The Biden Administration has announced a freeze on LNG export permits for 15 months to non-free trade agreement countries, arguing this period will be used to evaluate the impacts of LNG exports on energy costs, US energy security and climate change.
The move is likely to impact India if the freeze extends beyond a couple of months.
For India, the US is the third largest importer of LNG.
In September 2023, India imported 24,452 million cubic feet (MCF) of natural gas from the US, a steep jump from zero MCF in February 2016.
India's import of LNG from the US has jumped multiplefold post-COVID-19 era.
Informed sources said there might be an impact on the export of LNG from the US to India if the freeze extends beyond a couple of months.
The Department of Energy, in a statement last week, said that a temporary pause on pending applications will not affect already authorised exports, which total 48 Bcf/d.
It will also not impact our ability to supply US allies in Europe, Asia or other recipients of already authorised US exports.
"This administration is committed to the affordability of energy and economic opportunities for all Americans; strengthening energy security here in the US and with our allies; and protecting Americans against climate change and winning the clean energy future," said US Secretary of Energy Jennifer M Granholm.
"This practical action will ensure that DOE remains a responsible actor using the most up-to-date economic and environmental analyses," she said.
However, 18 Republican Senators in a letter to the Biden Administration on Thursday opposed such a move.
"American LNG exports have enhanced our geopolitical influence and international energy security across the board since 2016.
In addition to Europe, US LNG has a significant impact on energy security in Asia.
Japan and South Korea have been the top two destinations for importing US LNG," wrote the 18 Republican Senators led by James Lankford, Cynthia Lummis, and Bill Cassidy.
"Taiwan also imports US LNG, and India is rapidly increasing its imports as well. According to EIA, the four Asian countries accounted for one-fifth of US LNG exports between January and October of 2023. Stable and secure supplies of US LNG are critical to their energy security," the 18 Senators wrote.
The Biden Administration, they alleged, has already made a habit of slow-walking LNG permits, with the average permit taking more than 400 days, a large escalation from the 60 days of the Trump Administration and 90 days of the Obama Administration.
"LNG exports from the United States are also uniquely suited to decrease global emissions. Both China and India, two of the largest polluters globally, are top destinations for US LNG exports. Efforts to limit the export of LNG from the United States thus directly undermines the ability to reduce emissions through the use of clean-burning natural gas," they said.
Limiting US LNG exports does not have any impact on the world's demand for natural gas.
Instead, countries, including Russia and Iran, will simply produce more energy that is subject to less stringent environmental regulations.
As a result, limiting American LNG exports in the name of stopping climate change could do just the opposite and add to global emissions, Senators wrote.
However, climate change leaders across the US have applauded the Biden Administration for such a freeze.
"This decision is a major win for communities and advocates that have long spoken out about the dangers of LNG and makes it clear that the Biden administration is listening to the calls to break America's reliance on dirty fossil fuels and secure a livable future for us all. Strong leadership, that rejects fossil fuel industry fear-mongering, is our best bet to protect communities and ensure energy is affordable," said Ben Jealous, executive director, Sierra Club.
"World leaders agreed to transition away from fossil fuels at the COP28 climate negotiations last year and President Biden's decision today to pause new permits for LNG exports shows that he is taking that pledge seriously," said former Vice President Al Gore, founder, The Climate Reality Project.
Manish Bapna, president and CEO of the Natural Resources Defense Council, described this as the right call.
"The stakes could not be higher - for the climate, US leadership and our future. The administration needs to pause and get the facts. These are dangerous projects that would lock in decades more dependence on the fossil fuels driving us toward climate catastrophe," he said.
The Trump Campaign, in a statement, said that the decision to block the approval of new facilities to export American natural gas is one more disastrous self-inflicted wound that will further undermine America's economic and national security.