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Assistant U.S. Secretary for Energy Resources Geoffrey Pyatt has told reporters that U.S. allies have been reassured that the Biden Administration’s pause on LNG will not affect currently permitted exports.
"I've found that our allies who raise these issues with me, tend to be quickly reassured when you explain to them what this is, which is a pause," not a reversal, Pyatt told reporters in a call reported by Reuters.
"This policy will have no impact on currently permitted LNG exports,” he continued.
In the last week of January, the Biden Administration announced a pause in new LNG export project approvals, sparking intense backlash from Republicans and supermajor oil companies.
The stated justification for the pause is to give the Department of Energy time to review the environmental and economic impacts of this burgeoning segment of the fossil fuels industry.
The pause could linger on until after U.S. presidential elections on November 5.
During the temporary pause, the DOE will carry out a new updated review on the impact of such projects on health and communities.
Exxon CFO Kathy Mikells told Bloomberg on Friday that the pause was “a mistake” that would end up holding back net zero 2050 goals.
“Reducing production of LNG actually harms the world achieving net zero sooner rather than later,” Mikells said.
Natural gas production and LNG liquefaction for exports generate emissions, but these emissions are still 50% lower than compared to burning coal.
From an economic standpoint, the pause comes at a time of ample supply that is keeping spot LNG prices in Asia at their lowest in seven months, in defiance of typical seasonal pricing patterns for winter. The average LNG price for March delivery into northeast Asia last week was up by ten cents, week-on-week. That reflects a price of $9.60 per million British thermal units (MMBtu), compared to the seven-month low of $9.50 per MMBtu. The seasonal threshold is $10/MMBtu.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com