ǿմý

Red states build legal case against Biden LNG pause

By Pamela King, Carlos Anchondo, Brian Dabbs | 02/07/2024 06:40 AM EST

Federal law contains a “general presumption” that DOE will approve liquefied natural gas exports, 23 states told the Biden administration.

A tugboat helps guide a ship.

A tugboat helps guide the LNG Endeavor through Calcasieu Lake near Hackberry, Louisiana. Martha Irvine/AP

Twenty-three Republican-led states are teeing up their legal claims against the Biden administration’s decision to halt overseas shipments of liquefied natural gas.

In to President Joe Biden and the Department of Energy, the attorneys general of Louisiana, Texas and other states accused the administration of ushering in a “surprise freeze” that bows to the pressure of young climate activists, harms the economy and jeopardizes national security.

“Instead of addressing America’s real energy challenges,” the states wrote, “your administration has decided to double down on a reckless environmental agenda through this TikTok-inspired ‘pause.’”

Advertisement

In January, DOE announced that it would temporarily while it studies the climate and economic impacts of shipping the superchilled gas to countries that do not have a free-trade agreement with the U.S. The department cited growing concerns over whether LNG exports are in the public interest, a fundamental consideration in DOE approvals.

Red states in their letter to DOE invoked the “major questions” doctrine, a legal theory that says Congress must clearly authorize federal agencies to tackle politically and economically important issues. The Supreme Court has used the doctrine to invalidate an Obama-era rule governing climate pollution from power plants and the Biden administration’s plan to forgive $400 billion in student loans.

“[O]ur allies rely on LNG exports for their energy needs,” the states wrote. “And meeting this demand requires new export terminals leading to billions of dollars in capital expenditures and tens of thousands of new jobs.”

They added: “The Department’s pause jeopardizes all this work — all without the Department pointing to any ‘clear congressional authorization’ to issue this pause in the first place.”

The state attorneys general also wrote that Congress has not authorized the department to issue “blanket denials” of export permits. Instead, the White House pointed back to Biden’s climate executive order.

“But that order is not sufficient,” the states wrote.

They added that the Natural Gas Act requires DOE to approve LNG export applications to non-Free Trade Agreement nations unless the agency determines the shipments are not in the public interest.

The statute “creates a ‘general presumption of favoring [export] authorization,’” the states wrote, quoting a 1982 ruling from the U.S. Court of Appeals for the District of Columbia Circuit.

“In short,” the states wrote in their letter, “you are reconstructing the NGA’s regulatory structures.”

The states also argued that the pause violates notice-and-comment requirements under the Administrative Procedure Act, as well as the statute’s protections against unreasonable regulatory delays.

While DOE’s pause only applies to pending export applications, the move is expected to against existing projects.

“Although your administration has put this country in a difficult situation through this LNG ‘pause,’ you still have time to change course,” the states wrote.

In addition to Louisiana and Texas, the state attorneys general of Kansas, Indiana, West Virginia, Alabama, Alaska, Arkansas, Georgia, Idaho, Kentucky, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, North Dakota, Tennessee, Utah and Wyoming signed on to the letter.

DOE did not immediately respond to a request for comment on the states’ letter.

While environmental advocates have criticized LNG exports, domestic manufacturers have also pushed back against the shipments, which they say can threaten reliability and price risks for U.S. markets.

“It is ironic that while LNG exports decrease U.S. consumers’ reliability, it gives LNG buying countries guaranteed access and reliability of natural gas under contracts for as long as 20 years,” the Industrial Energy Consumers of America wrote in a Jan. 25 letter to DOE.

Granholm: LNG pause is ‘not unprecedented’

The legal threat comes as Energy Secretary Jennifer Granholm is ramping up her defense of the Biden administration’s pause, stressing that U.S. allies will remain “well-supplied.”

On social media and in a recent letter to The Washington Post, Granholm said the freeze is necessary to understand the long-term effects of LNG on climate change and communities that live near export facilities. The pause does not affect currently approved gas exports or halt projects under construction.

“Americans should have the latest understanding of what higher exports mean for our economy, our security, our environment and our health before U.S. energy leaves our shores,” she , which she touted on X, on Tuesday.

“Those saying otherwise are asking the [Department of Energy] — a department based in facts, data and science — to operate willfully blind to the realities around us,” Granholm added.

The pause is “not unprecedented, as the Energy Department has regularly updated our LNG analysis,” she said. The last time DOE’s process was updated was in 2018 and 2019, before the current surge in gas exports.

“We need to know what these greatly expanded exports mean for affordable and stable prices for American consumers and industries,” Granholm said.

The U.S. exported more LNG than any other country in the first half of 2023, according to DOE’s statistical arm, and U.S. LNG exports are anticipated to grow to 14.4 billion cubic feet per day in 2025, up from 11.8 bcf in 2023.

The oil and gas industry has assailed the Biden administration’s Jan. 26 announcement of the “temporary pause” on DOE approvals while the agency updates the economic and environmental analyses it uses to review LNG export applications.

On Tuesday, the House Committee on Energy and Commerce where Republican lawmakers lambasted the Biden administration over what they described as a “ban.”

That characterization was challenged by Gillian Giannetti, a senior attorney with the Natural Resources Defense Council, who said at the hearing that the repeated references to a ban reminded her of Inigo Montoya in “The Princess Bride,” who challenged the repeated use of the term “inconceivable” by another character in the movie.

“They keep saying the word ‘ban,’ but I don’t think they know what it means,” Giannetti said.

It’s unclear exactly how long DOE’s pause will last, although department officials have said it’s likely to stretch several months and will include a public comment component.

Granholm’s comments follow those of Assistant Secretary of State for Energy Resources Geoffrey Pyatt, who told reporters Monday that he’s told U.S. allies that the decision is a “pause” and not “a moratorium or a reversal.”

The Washington Post opinion piece that spurred Granholm’s response, written by the editorial board and published originally Jan. 29, called the pause “an election-year sop to climate activists that will do much more to unsettle vital U.S. alliances than to save the planet.” The opinion piece predicted the pause could endure through the November presidential election.

The editorial board said the pause “looks like a reenactment of the political theater over the Keystone XL pipeline.” Biden nixed the pipeline, which sought to ship crude oil from Alberta, Canada, to the U.S., in 2021. Republicans say the cancellation killed tens of thousands of potential U.S. jobs.

Meanwhile, on Monday, the Sierra Club and other environmental groups urged 15 global financial firms, including Bank of America and JP Morgan, to halt support for LNG exports.

“With the Department of Energy stopping the rubber stamping of new LNG export projects in order to consider their full impact on our climate, communities and economy, it’s time for the financial sector to do the same,” said Adele Shraiman, senior campaign strategist for the Sierra Club’s Fossil-Free Finance campaign. “The message is clear: there is no place for LNG expansion in a net-zero future.”

This story also appears in Climatewire.