White House halts major liquid natural gas project and new exports over climate concerns

Geoff Bennett:

The Biden administration is hitting pause on new projects involving the export of an important source of global energy. That's natural gas.

While the U.S. is currently the largest exporter of natural gas in the world, the White House argues the climate effects of these projects are just too great to ignore.

William Brangham breaks down what it's all about.

William Brangham:

Geoff, the Biden administration will not approve or even consider any new terminals that export liquefied natural gas, or LNG, until it completes a thorough review of their climate and national security implications. Industry groups criticize the decision, while environmentalists have hailed this as what they say is a key victory in trying to reduce the fossil fuels that are driving climate change.

Coral Davenport covers energy and environmental policy for The New York Times.

Good to have you back on the program.

What are the broader implications of this pause? I mean, natural gas is not going to go away. We still all use it every single day, but especially for the markets, where there is such demand for it, given the war in Ukraine, what are the impacts of this?

Coral Davenport, The New York Times:

The first thing to remember is, this decision comes as the U.S. is the largest natural gas exporter in the world and still has more of these terminals under construction.

U.S. natural gas exports are projected to double over the next four years, given all of the natural gas export terminals that are already being built.

William Brangham:

Even with this pause?

Coral Davenport:

Even with this pause.

So that takes you up to about four years out. That means that the U.S. is absolutely dominating the natural gas export market, but you have got these 17 terminals that are awaiting approval. These are the ones that will be halted, paused. This really is a very significant shift.

The White House hasn't said that they will be denied, but they're really raising the environmental bar of what it takes. The U.S. government has never denied a permit to build one of these natural gas export facilities. Now they're saying, we are going to take the climate impact of these into account.

And if they use a new methodology that finds the climate impact of one of these is too great to approve it, that absolutely could have a long-term, systemic effect of maybe not meaning zero natural gas export terminals are ever built, but it could really — beyond five years out, this could be something that we don't see new construction of very much at all anymore. So it's a big deal.

William Brangham:

The industry, as you have reported, is furious about this. They say this is going to cost jobs, raise money for American consumers, that it will drive up costs. They call this also a win for Russia.

Tell us a little bit about more of what their argument is.

Coral Davenport:

Their argument is — particularly that the geopolitical argument is that the U.S. has successfully used its ability as a natural gas exporter to, for example, weaken the power that Vladimir Putin has, that Russia has in cutting off natural gas supplies to Europe.

The U.S. has been able to redirect its own natural gas supplies to send it to our allies in Europe, to weaken the influence of Russia. That's very powerful. That's sort of the big geopolitical argument. That said, again, the glut of natural gas exports over the next three, four, five years is only growing.

So that — it really kind of depends on what the market looks like beyond five years. And there are some analysts who say we're already reaching a place where these natural gas exports are a glut, where there's so much production, where there's not as much demand.

That said, we don't know what markets are going to look like in the future. The big growth in demand is going to be from Asia. If, in the long run, the U.S. is not supplying that growth in Asia, what does that mean for sort of long-term geopolitical questions? We don't have answers for those.

William Brangham:

The environmental community, as you know and have reported, is thrilled about this. They're kind of surprised in some way at how fast the Biden administration moved.

I wonder if you could give us a sense, does this meaningfully achieve the goals that they all are searching for, which is a reduction in emissions, meaning, will this have a net impact on our climate emissions?

Coral Davenport:

Climate emissions are global, and they are caused — there are so many forces that influence emissions.

Ultimately, economists will tell you that the thing that reduces emissions is reduction in demand, fewer people driving gasoline-powered cars, fewer people using fossil fuels for electricity. There needs to be sort of a global shift. So will this one specific action change that? No.

But it is — it does seem like it will — it has really created a big shift in this one piece of the U.S. fossil fuel picture. I would say that we have seen big fights from the environmental group, the climate activist community over the last 10 years, over the Willow Project, which was a big oil project in Alaska.

They tried to get Biden to turn that down. He didn't. He went ahead and improved it. Keystone Pipeline, they had a victory in stopping one single oil pipeline. This is much bigger than those, because this is not one individual project. This is a systemic change. This is the turning of the tide in a really significant way. They got a big win.

William Brangham:

How much of this was about politics?

Coral Davenport:

This was an explicitly political campaign. Climate activists were very disappointed in President Biden for proceeding with the Willow oil drilling project in Alaska last year.

They felt that a lot of young voters, not necessarily would vote for Donald Trump, but would stay home, would not work to get out the vote. And they explicitly kind of found this issue and found this project, these gas export terminals, and said, we want to elevate this on social media, on Instagram and TikTok, and we want to bring it to the president's front door, and we will punish or reward him, the activists' words, based on what he does here.

He gave them what they wanted. And they are now preparing to go to swing states and use this as a moment to turn out young voters, who, of course, are crucial in this election, the largest voting demographic, hoping to bring out a couple more young voters in swing states specifically in response to this decision.

William Brangham:

All right, Coral Davenport of The New York Times, thank you so much.

Coral Davenport:

Great to be here.