Tough decision awaits Joe Biden about contentious US gas project

Washington DC — The Biden administration faces mounting pressure over whether to approve a huge new Louisiana LNG export project, with environmentalists saying the facility would undermine US 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 tonnes per year.

FERC, an independent arm of the US department of energy, gave CP2 final environmental approval in July 2023. US 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 department of energy 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 finalised, the source said.

Politico first reported the review.

The White House did not respond to requests for comment. A department of energy 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”.

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 before elections

Nearly 500 environmentalists have registered to protest at department of energy from February 6-8, said Jamie Henn, a climate activist.

Many who opposed Willow are galvanised 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 November 5 US 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 and 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 US to keep supply up.

In a letter to Biden administration officials, Eurogas, a group of 77 companies and associations, urged the US 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 legislators.

Reuters