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Federal Judge Blocks Biden’s LNG Pause

A Louisiana federal judge has blocked President Biden’s pause on new LNG export capacity approvals, ruling in favor of 16 states that sued the federal government for the pause.

President Biden signed what the White House called a pause on new LNG export capacity permits in late January under pressure from climate activists. Those claimed that LNG was even worse for the environment than coal and any new export capacity would aggravate what they see as an already grave situation with the earth’s climate.

In response to the move, 16 states, including Texas, Louisiana, and Florida, filed a lawsuit claiming that the suspension of new LNG export permits would affect the U.S. economy negatively and interfere with the supply of gas to allies in Europe that were trying to quit Russian gas.

The states also argued that the decision to halt permitting puts billions of dollars in investments in jeopardy, Reuters noted in a March report on the news.

“The ban will drive billions of dollars in investment away from Texas, hinder our ability to maximize revenue for public schools, force Texas producers to flare excess natural gas instead of taking it to market, and annihilate critical jobs,” Texas Attorney General Ken Paxton said in a statement at the time.

U.S. LNG exports to Europe have been on the decline following the pause on LNG exports, although it was probably not the only reason. Europe came out of winter with plenty of gas in storage and there was also the issue of price, which, for U.S. LNG is higher than alternatives.

Nevertheless, U.S. District Judge James Cain’s ruling should alleviate some of the tension in energy circles caused by federal government energy policies.

In his ruling, Judge Cain said that the government’s move had been arbitrary, capricious, and unconstitutional and that it had violated the Natural Gas Act. Judge Cain added that the Department of Energy had gone “above and beyond its scope of authority.”

By Irina Slav for Oilprice.com

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