The Biden administration is delaying a decision on a Louisiana liquefied natural gas (LNG) export project that would be the United States’ largest, but which has raised the ire of environmentalists, the New York Times reported on Wednesday.
Venture Global LNG’s Calcasieu Pass 2 (CP2) project is twice the size of the company’s present CP plant, with an export capacity of around 20 million metric tonnes per year. If built, it would make Venture Global one of the largest LNG companies in the world.
The White House is directing the Department of Energy to expand a review of LNG export projects to include more climate change criteria, the Times said, citing three unnamed sources familiar with the matter. The review could lead to delays of another 16 proposed LNG export projects.
A delay of a decision on CP2 until after the Nov. 5 U.S. presidential election could spare the White House from criticism from environmentalists, who form an important part of President Joe Biden’s base. Climate activists say new LNG projects lock in global reliance on fossil fuels for decades, and lead to emissions not just from burning gas but also from leaks of the powerful greenhouse gas methane.
Press officials at the White House and DOE did not have an immediate comment on the report.
Venture Global said the report was worrying if true.
“Such an action would shock the global energy market, having the impact of an economic sanction, and send a devastating signal to our allies that they can no longer rely on the United States,” said Shaylyn Hynes, a company spokeswoman.
European countries have sharply increased their LNG purchases from the United States since Russia’s invasion of Ukraine, as part of an effort to diversify its energy sources.
Venture Global and other LNG companies have also argued the expansion of U.S. LNG exports can help reduce overall greenhouse gas emissions by displacing coal in other parts of the world.
CP2 needs approval from the Federal Energy Regulatory Commission (FERC), a panel of three energy regulators that has traditionally approved most LNG projects. It also needs approval from the DOE in order to ship to countries with which the U.S. does not have a free trade agreement, including countries in the European Union and Asia.
Any moratorium on LNG export approvals could delay investment decisions by companies proposing new facilities, said Alex Munton, director of global gas and LNG research at consulting firm Rapidan Energy Group.
“There are no pre-FID (final investment decision) projects that have a clear regulatory path forward and so without that path, it will delay FIDs until next year at earliest,” Munton told Reuters on Wednesday.
(Reporting by Susan Heavey and Timothy Gardner; Editing by Paul Simao, Mark Porter and Jonathan Oatis)