Biden Adminstration's Pause on LNG Projects Impacts

With new discoveries and technologies developing at lightning speed, our fast-paced world is becoming increasingly interdependent. What happens in one region can have an almost instantaneous impact a world away.

And it’s not just global events that can have this effect. Business productivity and global economies are increasingly tied together. What’s happening in one industry can have significant ramifications on another. The ripple effects are ongoing.

One current example is the Biden administration’s pause on U.S. liquefied natural gas (LNG) projects, and this action’s impacts on our broader economy and global energy security.

As president of the Pennsylvania State Grange, the importance of energy reliability, affordability and security is an issue that I often hear from our members.

The Grange is the oldest agricultural and rural advocacy organization of its kind in the United States. Representing approximately 5,440 members of all ages, the Pennsylvania Grange – established in 1873 – is dedicated to the betterment of the American way of life through community service, education, legislation and fellowship.

Our mission is to support the local granges to help members grow as individuals, unify their communities and create opportunity through legislation and community service.

The U.S. and LNG

The U.S. is by far the largest producer of natural gas in the world, representing nearly a quarter of global natural gas production last year. Russia, Iran and China follow on the list of the top producing countries.

Given the tensions and overt ambitions that surround these marketplace competitors, our allies look to America as a stead-fast, dependable energy source, with a product that can be exported across the world in the form of LNG.

What is LNG?

LNG is natural gas that has been cooled and reduced to a liquid state. It can be used to generate electricity, heat and cooking fuel. It can also be used to create plastics and other petrochemical products.

Domestic agricultural production is an energy-intensive industry. We require a lot of energy – whether to fuel our farm equipment, heating farm buildings and greenhouses, or the electricity needed to power integrated systems. It takes an enormous amount of energy to grow and cultivate our products, and then get them to market.

Farmers across the state are constantly looking at ways to reduce their energy consumption and expense, and find environmentally friendlier alternatives. Natural gas and LNG have been pivotal in that regard.

Natural gas is a cleaner-burning fossil fuel, and the utilization of LNG helps to reduce greenhouse gas emissions.

As one of the top natural gas producers in the country (second only to Texas), Pennsylvania played a major role in that effort. The effects of the commonwealth’s role as a leader in the natural gas space can be felt throughout the state via jobs, tax revenues and economic activity.

Increased productivity and economic activity in one sector can often benefit others. Our members benefit from Pennsylvania’s role as an energy leader. The fact that our state is on the cutting edge of energy innovation, and has abundant energy resources, is a win-win for energy-intensive industries and citizens alike.

Current policies wrong

But the current policy of pausing U.S. LNG approvals is a step in the wrong direction. It halts economic progress and jeopardizes our state’s and our country’s role in the global energy market and puts our national security and international relations at risk.

If we don’t produce enough LNG to fulfill the need of the global market, other LNG-producing countries will step in to fill the void. Recent news articles have highlighted how this is already occurring.

Reuters recently reported that while many European countries have sought to reduce their dependence on Russia as an energy resource as a result of its ongoing conflict with Ukraine. However, many European Union nations are reluctantly increasing their reliance on Russia’s LNG supplies.

The energy needs of the world are not decreasing any time soon – if anything they continue to grow. If the U.S. will not supply the energy resources our allies need, those nations will be forced to find alternative countries that may or may not be aligned with our international policies and viewpoints.

Bad timing

As worldwide demand grows, for our country’s expanding gas industry, the pause could not come at a worse time.

The U.S. has been investing in the physical infrastructure needed to facilitate exports. Currently, there are eight LNG export terminals with a total LNG production capacity of approximately 14 Bcf/d in the United States.

There are an additional seven approved terminals under construction, which could nearly double the export capacity to 28 Bcf/d. Another nine terminals are currently approved with minimal or no construction started. The future of some of these projects are now at risk due to expiring authorizations.

Misguided policy

The LNG issue has united elected officials from both political parties – voicing opposition to the Biden administration’s actions and highlighting the negative ramifications that may occur from this misguided policy.

Our country’s role as an energy and natural gas leader is one that needs to be protected and promoted. There is too much at stake.

Pennsylvania’s vast natural gas supplies are an invaluable resource – benefiting countless industry sectors, including agriculture, and play a significant role in our national security strategy. It’s critical