The moratorium on exporting LNG hurts this state and Europe too
In 2016, after a lengthy permit approval process, the United States exported its first cargo of liquified natural gas from the lower 48 states. Since then, the U.S. has leapfrogged every other country to become the world’s largest exporter of LNG.
But in in January, following the same playbook that President Barrack Obama used for LNG and the Keystone XL Pipeline during his 2012 reelection campaign, President Joe Biden announced a “temporary pause” on LNG export approvals.
A destructive pause
Why would he do such a thing? The administration cites the need for updated economic and environmental analyses. But as with Obama, the motivation for the policy change is clear — and it comes out in the president’s own statement, in which he referenced the climate denialism of MAGA Republicans and the need to “heed the calls of young people and frontline communities.”
At the recent CERAWeek energy conference, Energy Secretary Jennifer Granholm tried to downplay the impact, explaining that by next year’s conference, this issue would be in the “rear view mirror.” But this pause could very easily have real world consequences.
Pennsylvania trails only Texas as the largest producer of natural gas. In the commonwealth, the industry supports over 120,000 jobs and contributes almost $50 billion in economic activity. During a November 2023 meeting of the bipartisan Philadelphia LNG Export Task Force, Chair Martina White noted that natural gas resources “not only fuel economic growth within the Commonwealth, but also offer us a unique opportunity to meet growing energy demand across the globe.”
LNG exports aren’t just good for economic growth, they are instrumental for achieving U.S. environmental and foreign policy goals. First, those exports have assisted many countries, especially in Asia, in backing out coal, thereby helping reduce global emissions.
Europe needs LNG
Second, they have been a lifeline for our closest allies. In 2023, the U.S. was the largest LNG supplier to Europe for the third consecutive year.
Nearly two-thirds of the U.S. LNG exports went to Europe in 2022, helping allies such as Germany loosen Russia’s grip on their energy supplies. With only 10% of Europe’s gas needs met by its own production, a lengthy U.S. export moratorium could eventually send many of those countries back to Russia for supplies.
Or, as many energy analysts suggest, supply could shift to Qatar, which is the world’s lowest cost producer. Commenting on a recent Qatari announcement about a significant expansion of that country’s LNG capacity, one analyst noted, “The signal the U.S. projects need to take from this (is): if they don’t go ahead, someone will.” Moreover, one should not forget that Qatar sits in a turbulent region, relying upon shipping lanes vulnerable to harassmentby the Houthis and others.
The economic consequences of the pause, as well as the dangerous global implications, have led to mounting pushback, especially among Pennsylvania’s Democrats who likely recognize real political danger.
In a joint statement, Senators John Fetterman and Bob Casey declared that they would push for a reversal, explaining, “This industry has created good-paying energy jobs in towns and communities across the Commonwealth and has played a critical role in promoting U.S. energyindependence.”
Democratic Governor Josh Shapiro has also expressed reservations, urging the president at least to limit the moratorium. Democratic Reps. Chris Deluzio and Susan Wild, who represent swing districts in the state, have voiced their own concerns, focusing on how it may affect the tens of thousands of people who workin the natural gas industry.
For their part, Pennsylvania voters aren’t crazy over the president’s LNG moratorium either. A recent poll shows 58% oppose Biden’s move, with 41% less likely to vote for him because of it.
Give up the moratorium
It’s not too late for the Biden Administration to shift course and give up the moratorium. LNG exports have created jobs in Pennsylvania and across the U.S., opened fruitful lanes of export for allies abroad looking to step out of Russia’s energy stranglehold, and made us the world’s leader in a growing market.
The effects of walking away from such success will harm state and local economies in Pennsylvania, as well as our allies across the Atlantic who’ve counted on, and who need, our LNG exports.
Jeff Kupfer, an adjunct faculty member at Carnegie Mellon University’s Heinz College, is a former acting deputy secretary in the U.S. Energy Department and former special assistant to the president for economic policy. He also serves as president of ConservAmerica.