How Biden-Harris Natural Gas Export Policies Could Harm The Economy

The foundational basis for the Biden-Harris permitting pause related to liquefied natural gas export facilities has fallen apart in recent weeks, and now the administration’s apparent anti-natural gas bias seems to be impacting funding decisions by the U.S. Export/Import Bank, called EXIM, as well.

The White House’s LNG pause decision was based on an inaccurate preview of an analysis by Robert Howarth, a Cornell University faculty member who has been a long-time critic of American natural gas and LNG. In a preview of his study released in January, Howarth originally claimed LNG’s life-cycle emissions range between 24% and 247% greater than coal. But the final release of that study, published in September, landed on a claim of 33%, a fraction of the original range claimed in the preview.

Meanwhile, data consistently demonstrates that natural gas and LNG are key to reducing both domestic and global emissions, a fact that has played a major role in enabling the US to meet carbon reduction targets over the last two decades, as a vast swath of coal-fired power plants have been displaced by natural gas.

The LNG Pause

To make matters worse, claims recently emerged that the administration may have withheld the fact that it had already conducted the very environmental review it claimed in January needed to be pursued by the Department of Energy as justification for invoking the permitting pause. Members of the House Oversight Committee sent a letter to Energy Secretary Jennifer Granholm last week demanding communications and documentation related to a draft study her department allegedly conducted in 2023.

“In imposing its LNG ban, the Biden-Harris Administration cited a need for an updated study of the potential environmental, economic, energy security, national security, and other impacts of additional LNG exports,” the lawmakers wrote. “The Committee has learned, however, that a draft study may, in fact, have already been compiled in 2023 and that DOE failed to provide this relevant information responsive to both the Committee’s requests and interested parties seeking disclosure of information under the Freedom of Information Act.”

The administration has had no response to the letter as of this writing, and that is a mistake given that allowing the allegation to hang out there leads to a credible conclusion that the entire basis for the LNG pause was flimsy at best. If accurate, that is a poor way to make major policy decisions, and if it is not accurate, then the public and industry are owed a detailed explanation why.

Why Mozambique LNG Matters

The appearances of political gamesmanship driving LNG export policy actions grow worse thanks to a 5-year delay by the EXIM in funding a $4.6 billion investment in the Mozambique LNG project unanimously approved by its board in 2019. Located on the Afungi Peninsula in northern Mozambique, EXIM’s literature on Mozambique LNG says the project would support 16,400 American jobs during a 5-year construction period.

Mozambique LNG’s 13 million tons per year LNG capacity can play an important role in meeting demand across key markets, while providing an alternative to sources vulnerable to geopolitical risks like those affecting the Strait of Hormuz. As China expands its influence in Africa through the Belt and Road Initiative, this U.S.-backed LNG project offers an opportunity for transparent, mutually beneficial investment without the dependency that often accompanies Chinese investments.

In 2022, President Biden launched the Partnership for Global Infrastructure (PGI) initiative, directing billions into renewable projects while side-lining traditional energy sources. Under this directive, EXIM approved a $1.6 billion investment for Angola’s solar industry but has yet to vote on natural gas infrastructure projects that could meaningfully expand reliable energy access across Africa. This calls into question EXIM’s adherence to its Congressional mandate to fairly evaluate all projects regardless of energy source.

The Bottom Line

Since the start of the Russia/Ukraine war, it has been clear that the U.S. can either play a major role in leading global LNG development or be a sideline player that allows competing countries like Qatar, Algeria, and yes, Russia to assert dominance. To his great credit, President Biden offered a clear signal to key European allies shortly after Russia’s invasion of Ukraine that America would be a leader and reliable partner under his administration.

Unfortunately, the permitting pause has had the impact of stalling the US industry’s expansion, enabling those competitors to make major inroads as dominant players in the market. It was a clear sign of faltering will that now appears to be impacting an already-approved project which would strengthen American relations with another willing strategic partner on the East coast of the African continent.

At worst, this is a case of playing crass politics with the country’s energy security. At best, it’s just a lousy way to make major energy policy decisions. Neither option is especially attractive.