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Biden could not have been more right when he said: “First, we’re coming together to reduce Europe’s dependence on Russian energy. Putin has issued Russia’s energy resources to coerce and manipulate its neighbors. That’s how he’s used it. … The United States, together with our international partners, we’re going to work to ensure an additional 15 — one five — 15 billion cubic meters of liquefied natural gas, LNG, for Europe this year.”
Our European allies trusted in Biden’s pledge, with many completely reworking their energy infrastructure and systems in anticipation of receiving years of stable U.S. gas exports. This dramatic shift in energy supply allowed Europe and the United States to present a united front against Russia, giving Ukraine a chance at victory.
Now, in a shocking about-face, the Biden administration has decided to put a halt on nonfree trade agreements, FTA, permitting new LNG facilities, a move that will surely lead to fears of a future supply disruption in Europe (various facilities under development that would have exported to countries who do not have an FTA with the U.S. will be subjected to this pause), and will cause the U.S. to lose market share to other gas providers who are more than happy to fill the hole left by our shortfall.
This decision could not have come at a worse time. The Ukraine war has dragged on for two years with no end in sight.
At the same time, the men and women of the American energy industry have stepped up, and production has never been higher. Energy prices and supply have remained stable in America even with the increased U.S. exports. In fact, U.S. LNG exports reached record highs in 2023, while domestic prices declined 62%.
So, why would the Biden administration take this action now? Why would we cause our European allies to scramble to find alternative sources of gas at a time when the continent is in such turmoil?
It has become increasingly clear this decision was a purely political calculation. The president has faced criticism from the Left for not doing more to slow down U.S. oil and gas production, and of course, we are in the midst of a presidential election cycle.
Inexplicably, the administration has decided that LNG exports are the easiest target to slow down the United States oil and natural gas industry. Once again, they have re-upped their tactic of using bureaucratic measures, such as halting new applications and adding a “carbon analysis” to the permitting process, to stonewall the industry.
In addition to messing up energy markets, this pause will increase emissions. The truth is LNG exports to Europe and other countries around the world will actually lower overall emissions. In fact, the Energy Information Administration has found that the U.S. has lowered its overall emissions more than any other country since 2005 by transitioning coal-fired power generation to natural gas. Why would we deny our friends and allies the ability to lower their emissions in the same way?
And slowing down our own exports will not slow worldwide energy demand. Berlin will still be cold in the winter, and Europe will be forced to look elsewhere for its supply.
Other countries will fill the void in the market. The countries stepping up to fill the void, such as India and China, are not held to the high regulatory standards U.S. energy producers are, which allows us to be one of the most sustainable producers of oil and natural gas in the world.
And here at home, the 650,000 men and women in the U.S. energy services sector will no longer see the industry’s economic benefits. Instead, the U.S. will risk higher energy prices of our own due to a misinformed political agenda.
Ultimately, I am confident this decision will be reversed either by the administration gaining an understanding of the terrible ramifications of this action or by Congress passing legislation to remove the Department of Energy from the non-FTA permitting process. Legislation such as Unlocking Our Domestic LNG Potential Act, introduced by former Ohio Rep. Bill Johnson earlier this year and soon to be reintroduced by Rep. Austin Pfluger (R-TX), would put the Federal Energy Regulatory Commission in charge of all LNG export permitting in the United States.
The bill must be immediately passed into law. In fact, leadership in the House and Senate should attach this important piece of legislation to any forthcoming spending bill. This law would make it more difficult for the Biden administration, or any other administration, to play politics with our energy security or that of our allies abroad.
Tim Tarpley is president of the Energy Workforce & Technology Council, the national trade association for the global energy technology and services sector, representing more than 665,000 U.S. jobs in the technology-driven energy value chain.
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