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Biden administration taking heat from all sides over Louisiana LNG project

[January 19, 2024] By Timothy Gardner and Curtis Williams

WASHINGTON (Reuters) - The Biden administration faces mounting pressure over whether to approve a massive new Louisiana LNG export project, with environmentalists saying the facility would undermine U.S. climate goals and business interests arguing it is essential for global energy security.

The Federal Energy Regulatory Commission, a panel of three regulators, is expected to vote in weeks or months on approval of Venture Global's Calcasieu Pass 2, or CP2, liquefied natural gas terminal (CP2) project.

If constructed, CP2 will be twice the size of Venture Global's present CP plant, with an export capacity of 20 million metric tonnes per year.

FERC, an independent arm of the Department of Energy (DOE), gave CP2 final environmental approval last July. U.S. energy law requires FERC to approve LNG projects unless they are not in "the public interest." It does not require the panel to consider climate implications. FERC has only once turned down an LNG project, in 2016, a move it later reversed.

CP2 would also need approval from the DOE to export LNG to countries with which Washington does not have a free trade agreement, including ones in Europe and Asia.

The administration of President Joe Biden is mulling a plan to add a stringent review on LNG export permits, including criteria on how LNG affects climate change, said a source with direct knowledge of the administration's talks.

One possibility is a moratorium on permits until the details of the environmental review are finalized, the source said.

Politico first reported the review.

The White House did not respond to requests for comment. A DOE spokesperson said the department had no update on its approval process.

Bill McKibben, an environmentalist who led a successful fight against the now-cancelled Keystone XL oil pipeline, said any approval of CP2 by the Biden administration "would be a huge miscalculation."

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Model of LNG tanker is seen in front of the U.S. flag in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

McKibben said CP2 would release more greenhouse gases than ConocoPhillips' Willow oil and gas project in Alaska that the administration approved last year. Environmental groups have filed lawsuits over the Willow decision.

'REBUILD TRUST' AHEAD OF ELECTION

Nearly 500 environmentalists have registered to protest at DOE from Feb. 6-8, said Jamie Henn, a climate activist.

Many who opposed Willow are galvanized against CP2, with online #StopLNG videos getting millions of views, Henn said. Pausing approval of LNG projects to allow full climate assessments "would be one of the fastest ways Biden could rebuild some trust with a core part of his base," ahead of the Nov. 5 U.S. elections, he said.

The administration is also getting pressure from business groups in Asia and Europe to approve LNG projects.

Singapore-based Asia Natural Gas & Energy Association of energy producers and buyers said in a letter to Energy Secretary Jennifer Granholm that LNG helps Asian countries transition off coal and that the group has concerns about the commitment of the U.S. to keep supply up.

In a letter to Biden administration officials, Eurogas, a group of 77 companies and associations, urged the U.S. to avoid an "unnecessary prohibition" of LNG exports to Europe as it seeks to phase out gas imports from Russia after its invasion of Ukraine.

Consulting firm Rapidan Energy Group said in a note to clients the Biden administration is unlikely to issue any new export licenses before the elections amid pressure from environmentalists and Democratic lawmakers.

(Reporting by Timothy Gardner, Curtis Williams in Houston and Jarrett Renshaw in Philadelphia; Editing by Matthew Lewis)

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