The politics behind Biden's natural gas dilemma
President Biden faces intense election-year pressure from his left to thwart a huge expansion of U.S. liquefied natural gas exports.
Why it matters: LNG sits at the crossroads of climate and foreign policy.
- The U.S. is already the world's largest supplier, but the Biden administration faces thorny decisions as project plans and export permit applications pile up.
Driving the news: Prominent activists, including Bill McKibben, just announced a three-day sit-in next month at the Energy Department.
- The planned civil disobedience is part of a wider pressure campaign against LNG from environmentalists and some Democratic lawmakers.
- A central target is Venture Global's big planned Calcasieu Pass phase 2 (CP2) project in Louisiana.
The big picture: The U.S. LNG surge provides Biden with geopolitical leverage. That was apparent as cargoes helped Europe replace Russian gas.
The intrigue: LNG's role in climate policy is a Rorschach test.
- Backers make a pragmatic case that it helps displace overseas use of coal, the most CO2-emitting fuel, while maintaining energy security.
Yes, but: Activists point to science showing Paris Agreement targets require getting off all fossil fuels, and fear new projects will lock in emissions for decades.
- And methane releases in gas production and processing erode LNG's advantage over coal. Yet by how much is hotly debated.
Catch up fast: Domestic LNG exports, enabled by the shale boom, began in 2016, and projects under construction are slated to keep boosting shipments.
- Last fall, the International Energy Agency estimated exports would rise 60% from 2022-2026. Projects on the drawing board would add even more in later years.
What we're watching: How Biden views the risk that climate-minded voters would be upset by greenlighting more exports.
- Some analysts say the White House could delay decisions until after the 2024 election.
- ClearView Energy Partners said in a note that a freeze on approvals for more study, and perhaps a new regulatory proceeding, would be a "bid for young voters."
The odds: Rapidan Energy Group sees just a 20% chance Biden officials approve new LNG exports to countries without free trade deals with the U.S. — which basically means the biggest markets — before the election.
The bottom line: This could be the defining energy policy battle of 2024.