The Incredible Dumbness of Biden’s War on LNG, Part Deux

Guest “You Can’t Fix Stupid, Part Trois” by David Middleton

Biden’s pause of new LNG export permits is truly a “stupid and futile gesture“…

APRIL 17, 2024

U.S. natural gas trade will continue to grow with the startup of new LNG export projects

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO)

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In our recently released Short-Term Energy Outlook (STEO), we forecast that U.S. liquefied natural gas (LNG) exports will continue to lead growth in U.S. natural gas trade as three LNG export projects currently under construction start operations and ramp up to full production by the end of 2025. We also forecast increased natural gas exports by pipeline, mainly to Mexico. In our STEO forecast, net exports of U.S. natural gas (exports minus imports) grow 6% to 13.6 billion cubic feet per day (Bcf/d) in 2024 compared with 2023. In 2025, net exports increase another 20% to 16.4 Bcf/d.

We forecast that U.S. LNG exports increase 2% in 2024 to average 12.2 Bcf/d. In 2025, we forecast that LNG exports grow by an additional 18% (2.1 Bcf/d). We forecast U.S. natural gas exports by pipeline to grow by 3% (0.3 Bcf/d) in 2024 and by 4% in 2025. We expect pipeline imports to decline by 0.4 Bcf/d in 2024 and then increase slightly (0.1 Bcf/d) in 2025.

In 2024–25, we forecast that existing U.S. LNG export facilities will run at similar utilization rates as in 2023. Annual maintenance typically occurs in the spring and fall, when global LNG demand is lower and temperatures are mild. In April and May 2024, we expect LNG exports to decline while two of the three trains at the Freeport LNG export facility undergo annual maintenance. Later in 2024, we expect that Plaquemines LNG Phase I and Corpus Christi Stage 3 will begin LNG production and load first cargoes by the end of the year. In 2025, the developers of Golden Pass LNG plan to place in service the first two trains of this new three-train LNG export facility.

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO)

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We forecast an increase in U.S. natural gas pipeline exports to Mexico as several pipelines in Mexico—Tula-Villa de Reyes, Tuxpan-Tula, and Cuxtal Phase II connecting to the Energía Mayakan pipeline on the Yucatán Peninsula—become fully operational in 2024–25. These pipelines started partial service in 2022–23 but have not been operating at full capacity. Also, flows via the Sur de Texas-Tuxpan underwater pipeline are likely to increase slightly in 2024 when it begins delivering natural gas from the United States to Mexico’s first LNG export project, Fast LNG Altamira.

U.S. natural gas pipeline imports from Canada remained relatively unchanged over the last two years (2022–23), averaging 8.1 Bcf/d. We expect pipeline imports from Canada to remain a key supply source, particularly for the U.S. Midwest region during winter months.

U.S. LNG imports, which primarily serve New England and generally peak in winter months, declined slightly in 2023, mainly because of record-warm winter weather. We expect LNG imports to average about 0.1 Bcf/d in 2024–25 and continue to serve as a marginal supply source during periods of high demand, particularly in the winter months.

Data source: U.S. Energy Information Administration, Natural Gas Monthly

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Principal contributor: Victoria Zaretskaya

Tags: forecasts/projections, natural gas, international, monthly, pipelines, STEO (Short-Term Energy Outlook), exports/imports, United States, LNG (liquefied natural gas), Canada, Mexico

US EIA

Biden’s imbecilic pause did not affect LNG facilities that are fully permitted and/or under construction. By the time the next president reverses this malfeasance next year, LNG exports will have climbed by about 2 billion cubic feet per day (Bcf/d) as new facilities come online. Projects currently under construction will add enough capacity (~17 Bcf/d) to more than double the current export volume (~12 Bcf/d).

At worst, the moronic pause in Department of Energy (DOE) permitting will delay final investment decisions (FID) for about 13 Bcf/d of capacity additions. 7 Bcf/d of that total have already been approved by FERC.

FERC is the agency that approves the construction of LNG facilities. DOE approves permits to export LNG to nations that do not have free trade agreements (FTA) with the US.

An Amazingly “Futile and Stupid Gesture”

Sixteen states have sued the Biden administration over this unlawful pause in LNG export permitting:

March 21, 2024 | Press Release

Attor­ney Gen­er­al Ken Pax­ton Sues Biden to Stop Unlaw­ful Ban on LNG Exports

Texas Attorney General Ken Paxton has filed suit to block the Biden Administration’s unlawful and indefinite ban on approving applications to export liquified natural gas (“LNG”) that the Department of Energy itself has already acknowledged has “no factual or legal basis.” 

Texas, along with Louisiana and fourteen other states, has filed a lawsuit to void the unconstitutional LNG export ban, which ignores the Natural Gas Act’s presumption in favor of exports, decades of Department of Energy policy, and State and private reliance on exports. Texas is the nation’s leading producer of both crude oil and natural gas. The Biden Administration’s ban stands to harm the Texas economy and the millions who rely on Texas energy.

“Biden’s unilateral decree disregards statutory mandates, flouts the legal process, upends the oil and gas industry, disrupts the Texas economy, and subverts our constitutional structure,” said Attorney General Paxton. “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. I will not stand by while Biden attacks Texas.”

To read the filing, click here.

Ken Paxton, Attorney General of Texas

This should be an easy win for Louisiana et al…

109. Reporting has also unveiled other possible motivations behind the unexplained LNG
     Export Ban. For example, White House officials have acknowledged that “one significant reason for the” LNG Export Ban “was to address concerns of young and climate-focused voters,” whom “the administration needs . . . in the fall.” R. Rapier, How An American LNG Export Pause Could Increase Global Carbon Emissions, Forbes (Jan. 29, 2024), https://perma.cc/3WQR-84HK. The “hope is that announcing this pause will energize them to vote for Biden in the November election.” Id.
110. Other reporting describes President Biden’s climate envoy, John Podesta, as an architect of the LNG Export Ban, and notes that Podesta’s brother is a lobbyist for foreign interests— including Russian LNG oligarchs—who stand to benefit significantly from the Ban. See A. Goodman,
     John Podesta Was Behind Biden’s Decision To Pause Natural Gas Exports. His Lobbyist Brother Stands To Benefit, Wash. Free Beacon (Feb. 15, 2024), https://perma.cc/P3JW-AZSA.

Louisiana et al v Biden et al