Precarious Predictions Prop Up Biden Administration’s Predilection for LNG Pause
Reviewing previous studies, anticipating extensive public comments, and considering DOE’s statements, Arbo put together an estimated LNG pause timeline.
Originally published for customers February 9, 2024.
What’s the issue?
The Senate Committee on Energy and Natural Resources held a hearing yesterday to examine the politics, policy goals, and process of the Department of Energy’s (DOE) forthcoming Liquified Natural Gas (LNG) study and determination the Biden Administration recently directed to be completed pursuant to DOE’s authority under the Natural Gas Act to issue export licenses for LNG. At issue is: 1) the necessity of pausing approvals while completing the study; 2) the lack of a declared timeline for the study’s completion; 3) the message the pause sends to domestic and global markets and stakeholders; 4) the role of U.S. LNG in global climate efforts; and 5) its impact on planned projects and associated jobs and economies.
Why does it matter?
As the world’s largest and cleanest democratic exporter of LNG, the status of U.S. supply is a big deal. The level of uncertainty (political risk) embedded into the policies controlling U.S. LNG supply impacts global markets, climates, and ongoing armed conflicts.
What’s our view?
As we wrote immediately after “the Pause” hit the press, it is absolutely about politics more than policy, price, projects or any other issues discussed at the hearing. And while some senators don’t consider it a big deal, none dissented from the bipartisan consensus of Chairman Manchin and Ranking Member Barrasso that the goals, timing, and manner of the pause are predominantly political.