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The Biden administration has launched a review into the approval criteria for new LNG production capacity, Politico has reported, citing unnamed sources in the know.
According to the report, the review could lead to fewer approvals, hindering what has so far been a fast and furious expansion that turned the United States into the largest LNG exporter in the world.
The review is being reported amid a surge in environmentalist opposition to new LNG facilities on the Gulf Coast. The specific focus of the opposition push is the CP2 project led by Venture Global, operator of the Calcasieu Pass facility and a company that made headlines after it got sued by European energy majors for failing to deliver contracted LNG cargos.
Coastal communities in Louisiana and Texas have lived with the oil and gas industry for years and now, with the prioritization of environmental issues in federal energy policies, they have grabbed the chance to voice their grievances related to pollution. Climate activist are taking advantage of these grievances to pursue their zero-hydrocarbons agenda and call for an end to LNG.
Indeed, the administration has already made the approval process for new LNG capacity lengthier that it was before. Reuters reported last October that under Biden, the approval process has gone from seven weeks to eleven months. Even during the Obama presidency, approvals for LNG plants took less than they do now under Biden, data from the Department of Energy showed.
Yet opposition remains relentless and a lot of Biden’s voters are energy transition fans and activists. At the same time, Europe, the biggest buyer of U.S. LNG is Biden’s strongest political ally and reducing the availability of natural gas for this ally might not be taken well as it would push prices higher.
Exports of natural gas have increased fourfold in the last ten years, Politico noted in its report, and have pitted the climate change camp against the national interest camp that sees higher output and exports as strengthening the U.S. position globally.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.