Earlier this month, the Department of Energy announced the first new export authorization for liquefied natural gas (LNG) in over a year. Expanding exports of LNG will improve the U.S. economy, create jobs, and support our allies abroad.
In January 2024, the Department of Energy (DOE) under the Joe Biden Administration paused approvals of LNG exports to any non-Free Trade Agreement (FTA) countries. The administration blamed dated environmental and economic analyses for the “temporary pause.” The more likely explanation for the policy change was appeasing climate activists in an election year.
From a climate and emissions perspective, LNG is a better option than coal and petroleum. A shift in the U.S. from coal toward natural gas led to a significant decline in CO₂ emissions. Through the 2000s and much of the 2010s, the United States imported LNG, but domestic production expanded rapidly after 2014. Today, the United States is the largest exporter of LNG in the world. If the Biden Administration and activists were serious about reducing emissions, exporting cleaner LNG around the world to replace coal would clearly be advantageous.
Aside from the climate angle, the pause aggravated national security issues. NTU wrote repeatedly in recent years that reducing U.S. energy exports benefits Russia as it wages war on Ukraine. Following the Biden Administration’s pause, the U.S. went from providing 46.5% of Europe’s liquefied natural gas to 37.8% and Russia jumped from the fourth largest share of LNG imports to the EU to the second largest behind only the U.S.
Fortunately, the Donald Trump Administration and U.S. Secretary of Energy Chris Wright removed the export pause. The first new approval went to the Commonwealth LNG project in Louisiana. This project is projected to be able to export more than 1.2 billion cubic feet of LNG per day, and the export approval lasts through 2050. The Commonwealth permit should be the first in a continued expansion of U.S. LNG exports in the coming years.
Beyond removing this Biden-era freeze on approvals, there is more Congress can do to ensure American energy security and prevent similar poorly planned changes to our energy policy. Following the initial announcement of the pause, Representative August Pfluger (R-TX) introduced the Unlocking our Domestic LNG Potential Act of 2024. The legislation aimed to change control over the import and export restrictions from the Department of Energy to the Federal Energy Regulatory Commission (FERC) and to broaden the number of countries that could receive LNG exports from the U.S. The Act was passed by the House, but not acted on by the Senate.
Currently, the DOE has oversight of regulation for constructing and operating LNG terminals to import and export natural gas. As demonstrated by President Trump in the last month, a new president can enact sweeping changes when he takes office. Without action by Congress, a future administration may reverse policies and degrade U.S. energy security. Congress can shift the power over LNG imports and exports back to FERC as it originally was under the Natural Gas Act of 1938. Under FERC, it is less likely that U.S. exports of LNG would decline simply as the result of one election.
Congress should also expand eligibility for U.S. LNG exports as outlined in the above bill. As it stands, countries with free trade agreements with the United States do not have to contend with the same import and export regulations for LNG. Approvals for new exports to countries with free trade agreements are considered in the “public interest” but this is a short list that does not include any nation in Europe, half of South America, and the majority of both Asia and Africa. The Unlocking our Domestic LNG Potential Act would expand this designation beyond just free trade agreement partners, which would allow the U.S. to more expeditiously construct and operate LNG terminals.
The Department of Energy under President Trump is more willing to allow the sale of U.S. LNG than its predecessor as evidenced by the newest approval in Louisiana. While this is certainly beneficial to American industry and our allies, there is still more room for Congress to open LNG trade to the world.