The Daily Telegraph - Saturday
Biden pauses US gas boom amid green lobbying
JOE BIDEN has halted new natural gas export licences after bowing to pressure from net zero activists, in a move that risks squeezing supplies to Britain.
The US president has ruled that licences for new export terminals will be subject to an inquiry, effectively meaning approvals will be delayed until after elections in November.
His decision has huge potential implications for the UK, which relies on imports of liquefied natural gas (LNG) for a third of its gas supplies. Announcing the inquiry – which has been hailed as a major victory by campaigners – Mr Biden warned that “climate change is the existential threat of our time”.
He said: “During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment.”
About half of Britain’s LNG imports, or 13pc of total gas consumption, come from America. Any restriction of supply is likely to affect UK prices and energy security. Existing export deals are unaffected. The last review of US LNG export projects was in 2018 since when capacity has tripled, with the US becoming the world’s top LNG exporter last year. It is to shoot higher by 2030 with projects under construction.
Four key terminals with export approvals pending are expected to be affected by the pause. The projects at risk include ones by Sempra Infrastructure, Commonwealth LNG and Energy Transfer (ETN), as well as what would be the country’s largest terminal, Venture Global’s Calcasieu Pass 2 (CP2) LNG project in Louisiana. A Venture Global spokesman said that the pause could send a “devastating signal to our allies that they can no longer rely on the United States”. Germany accounts for nearly half of the LNG capacity that was booked to come from CP2. Jennifer Granholm, US energy secretary, said: “The pause will not affect already authorised exports nor will it impact our ability to supply our allies in Europe, Asia or elsewhere.
“We remain committed to ensuring our partners’ medium-term energy needs are met and, if needed, the department can determine if exceptions should be made for national security needs.”
Ross Dornan, markets intelligence manager at Offshore Energies UK, which represents the UK’s gas, oil and wind energy companies, said: “It’s crucial that we invest in domestic production otherwise our reliance on imports will continue to grow – which is bad for the economy, energy security and overall emissions.” Ebony Twilley-Martin, the US director of Greenpeace, called it an “incredible win” for environmentalists.
Restricting the availability of gas risks having a powerful impact on inflation, as shown after the pandemic when spiking energy prices linked to Vladimir Putin’s invasion of Ukraine turned high price rises into a fullblown cost of living crisis.
A Department for Energy Security spokesman said: “The USA has confirmed the pause will not affect existing exports or supplying European allies, so we do not expect this to have any impact on energy security.”