DV Journal

A new study shows the popularity of U.S.-based liquid natural gas (LNG) continues to rise, despite efforts by environmentalists and the Biden-Harris administration to promote unreliable renewable energy.

The survey by Wood Mackenzie found LNG demand in Asia was expected to double by 2050, providing countries with an affordable alternative to coal, the region’s dominant electricity source.

“Without certainty of an affordable supply, their fallback position, quite understandably, is to stick with a fuel they are familiar with and which they know is likely to be inexpensive and plentiful: coal,” said Paul Everingham, the CEO of Asia Natural Gas & Energy Association (ANGEA) which commissioned the study.

The U.S. is the world’s largest exporter of LNG. It sent 20.9 billion cubic feet per day to other countries, according to the U.S. Energy Information Administration (EIA). Exports surged in 2022 as the world pivoted from Russia’s LNG after its invasion of Ukraine.

It’s particularly important to Pennsylvania’s economy. The Keystone State ranked second in natural gas-producing states, behind only Texas. EIA statistics showed the state was the second-highest exporter of natural gas to other states.

That surge was threatened by the Biden-Harris administration last January when it enacted a temporary pause on new LNG exports and halted approvals of new export terminals. The administration said it was needed to tackle climate change and further reduce carbon emissions. A federal judge issued a preliminary injunction over the summer.

While the incoming Trump administration is expected to revoke the temporary pause, ANGEA hopes the move happens sooner, rather than later. The survey said the U.S. LNG could make up to 33 percent of the global supply by 2035, if planned and proposed projects are developed. Those projects are not expected to come online until the later stages of the 2020s.

The EIA said last month Asia saw an increase in LNG imports this fall due to milder temperatures. It’s hopeful LNG storage in Japan and South Korea will remain at peak levels, but noted that’s not a guarantee. LNG storage levels in those countries tend to average 50 percent of capacity, far below the European Union, which hit 100 percent this year and last year.

That disparity in storage highlights the challenges developing nations like Bangladesh, Thailand, and Indonesia face.

The Wood Mackenzie analysis warned those Asian economies and the environment would suffer if the American LNG pause took effect. The survey predicted a jump in LNG prices as Asian buyers shift to less-competitive markets instead of the U.S.

That would force countries to remain reliant on coal, which is cheaper to produce but worse for the environment. Wood Mackenzie analysts predicted Asia would burn enough coal per year to equal the annual emissions of 20 million cars.

And despite claims from environmentalists that wind and solar-produced energy can and would eventually take over for fossil fuels, Wood Mackenzie officials believe that’s not feasible.

“Bangladesh, for example is densely populated, which makes developing renewable projects difficult close to demand centers. Meanwhile, countries such as Thailand and Indonesia have limited ability to harness onshore wind power due to low wind speeds,” said Robert Liew, Wood Mackenzie’s director for Asia renewables research.

Bangladesh and Indonesia burned a record amount of coal in 2022 and 2023. The countries promised to shift to gas-fired power and renewable energy, but Liew expressed skepticism at their ability to wean off coal if there’s a limited supply of American LNG.

Another competing factor involved extremely ambitious climate goals set by politicians. Indonesia’s new prime minister recently vowed to phase out coal by 2020 and reach net zero by 2050. Energy consultant Ember Energy suggested the country would have to retire three gigawatts of coal annually to meet those goals.

That’s why Craig Stevens, a spokesperson for the GAIN Coalition and former senior advisor to U.S. Energy Secretary Sam Bodman, said the LNG pause needed to end, so energy infrastructure projects could start up again. That would give Americans jobs and the globe access to cleaner-burning fuels.

“America is blessed with tremendous energy resources, and it would be wise to develop those resources to strengthen the U.S. economy and power our allies, instead of forcing them to buy their energy from other countries,” he said.

When President Joe Biden announced his “temporary pause” on liquid natural gas (LNG) exports in January, he said that it “sees the climate crisis for what it is: the existential threat of our time.”

A federal judge put a stop to the ban six months later.

“[The] Defendants’ action were outside the scope of their authority and rooted in politics and Defendants’ climate change policies,” wrote U.S. District Judge James D. Cain Jr. last week as he issued a preliminary injunction.

Cain said the 15 state attorneys general who sued the administration were justified  in their actions because the country’s LNG market is expected to boost gross domestic product by $46 billion by 2030. He noted that the Department of Energy last year rejected a request to end LNG exports.

“This ruling reinforces what we’ve long known: The moratorium, even if temporary, is foolish, dangerous, and harmful to the U.S. economy and our allies overseas,” said Pennsylvania Energy Infrastructure Alliance spokesman Kurt Knaus.

Despite Pennsylvania’s status as America’s second-highest natural gas producer, it was not involved in the suit.

The LNG export pause still caused waves within Pennsylvania politics. Democratic Gov. Josh Shapiro said he hoped it would be short. Democratic U.S. Sens. Bob Casey Jr. and John Fetterman sent a letter to the Biden administration expressing their opposition.

Marcellus Shale Coalition President Dave Callahan told DVJournal it is time for the White House to listen to the courts and energy-supporting lawmakers to end the policy. “We call on the Department of Energy to begin processing all pending permit applications immediately.”

The American Petroleum Institute-Pennsylvania argued the pause never made much sense because it ceded America’s energy advantage to foreign nations and threatened thousands of jobs.

It’s safe to say the natural gas industry powers the Keystone State’s economy.

The only state that produces more natural gas is Texas, according to U.S. Energy Information Administration (EIA) statistics. A 2023 study revealed the industry contributed $41 billion to the state economy, along with 123,000 jobs. It’s also contributed $2.7 billion to Pennsylvania communities through the impact fee.

Callahan said it proves LNG protects global energy security and environmental progress while helping Pennsylvania’s economy.

Nationally, EIA statistics show American companies exported more LNG than any other country last year. And 66 percent of those shipments went to gas-hungry European nations like France, the Netherlands, Germany, and the United Kingdom.

That’s changed since Biden’s LNG export pause was announced.

Gas and oil analytics company ICIS reported that Russia took over as Europe’s biggest supplier of natural gas in May. They initially said that so-called “one-off” factors caused Russian gas imports to eclipse U.S. imports by one percent.

Yet, the EU remained reliant on Russian LNG versus American LNG last month, according to ICIS. While the volume difference was .24 billion cubic meters, the numbers troubled energy analysts.

“If we put a pause in the permitting, that tells [the EU and Asia] this natural gas from America may not be available in the future,” Trisha Curtis, CEO of energy consultant Petronerds, told DVJournal.

American LNG will continue to flow to the EU in the short term. But few contracts go beyond 2030 despite the EU’s top energy official saying last year that there “will be a need for American energy.” Some of that has been credited to the EU’s ambitious climate goals.

Pennsylvania energy advocates have argued the state needs more policies to attract and retain businesses, specifically on permitting reforms.

They’ve also criticized Shapiro and Democrats for proposing a Pennsylvania-centric carbon cap-and-trade initiative. That legislation is dead, according to legislative sources.

Why did Biden hit the pause button on LNG exports? November politics.

The White House met with environmentalists in the months leading up to the executive order. One influencer warned voters would “reward or punish” the president for the export ban.

Curtis scoffed at the idea that Biden could win the election by catering to 20-something-year-old environmentalists. She said the “environmental stuff means nothing” because carbon emissions dropped 36 percent from 2005 through 2021 in the U.S. That drop was credited to the switch from coal to natural gas.

When asked why the administration enacted the pause despite science showing natural gas was good for the environment, Curtis said it was because policymakers don’t understand how energy works.

“They’re putting greenwashing ahead of humankind, truthfully.”

Please follow DVJournal on social media: Twitter@DVJournal or Facebook.com/DelawareValleyJournal