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CANNONSBURG, Pennsylvania — On Tuesday, ConocoPhillips CEO Ryan Lance called on the Biden-Harris administration to end “this crazy LNG permitting pause” and allow the United States to lead the liquefied natural gas industry.
In January, the Biden-Harris administration implemented a moratorium on permits to export the U.S.’s liquid natural gas so they could take a “hard look” at the effect the industry was having on the environment and the economy. The moratorium stopped approvals for exports from all U.S. LNG projects.
Lance, who spoke at the Gastech conference in Houston, stressed that the industry needed permitting reform, “and we need more infrastructure.”
U.S. Energy Secretary Jennifer Granholm promised at that time the pause would be over “in a matter of months,” but nine months later, the uncertainty that it caused became deep and profound. The uncertainty is less worrisome in the near term than in the future because the energy industry doesn’t plan its business for what will happen in the next two or three months. It plans its business, similar to agriculture, now for the next ten, even twenty years.
Late last week, Reuters reported from Singapore that the major buyers of U.S. LNG flagged risks of purchasing cargoes from the U.S. following the Biden-Harris administration’s decision to pause export permits to non-free trade agreement countries.
“Officials from Taiwan’s CPC Corp and Germany-based SEFE, which trades LNG cargoes and sells in Asia, stressed the importance of reliability of supply while responding to a question on the impact of the U.S. export pause on Asian markets,” the outlet said.
So where will these countries purchase their LNG’s going forward?
The answer is Russia.
Jane Liao, CEO of CPC Corporation’s natural gas business in Taiwan, said at the APPEC Conference last week that, in terms of dealing with the U.S., “We are quite ambivalent now, meaning we prefer something that is more firm.”
Liao said Chinese and Indian purchases of Russian LNG cargoes would ensure the market remains balanced, and it will continue to purchase from Russia.
This is why Lance called the moratorium “this crazy LNG permitting pause.”
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The consequences will be dire for the industry in four to five years, but they also carry national security implications now.
Gas extracts from the Marcellus Shale, liquified and shipped around the world as LNG, are the lifeblood of Pennsylvania’s economy and arguably help counter Russia’s aggression in Ukraine. It’s unclear why this moratorium has not been lifted by Vice President Kamala Harris, who now says she supports the hydraulic fracturing industry, but it’s a question the Democratic presidential nominee needs to be asked when she discusses Pennsylvania and national security.
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