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The Biden administration finally got its chance to respond to critics of its recent pause on liquefied natural gas export permits. Its main justification: The world market — at least the part the U.S. wants to serve — probably has enough gas already. The purpose of the pause, Deputy U.S. Energy Secretary David Turk told a Senate hearing, is to make sure the U.S. doesn’t build any more LNG export capacity than “what our allies absolutely need.”
Setting aside that the pause is also at least partially a political stunt aimed at winning climate voters in the upcoming election, Turk’s argument captures why LNG is so controversial. For industry advocates, U.S. LNG served as a critical defense for Europe against Russia, and has done as much as any technology to reduce net carbon emissions in China and other Asian countries which have substituted it for coal in the power sector.
The key question is how long those trends can last. Europe is already satisfied, and analysts expect LNG demand there to peak next year, well before any new U.S. LNG projects would be operational. More growth is possible in Asia, especially in China. But Turk’s reference to “allies” suggests the administration may be less enthusiastic about compromising its own climate goals (and reelection chances) in order to serve China. That’s especially true since, as the ever-astute climate columnist David Roberts observed, the only scenario in which U.S. LNG continues to offset global coal emissions beyond 2030 is one in which renewable energy deployment has fallen far off track, and the world has blown well past the Paris Agreement targets. For those in industry who see those targets as unrealistic, however, every LNG molecule the U.S. doesn’t sell is one that Qatar will.
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