{J} oe Biden will block the approval of critical new liquified-natural-gas (LNG) export permits on environmental grounds, leaving America’s allies freezing in the dark and strengthening Vladimir Putin.
Biden’s strategically crippling decision will cause already wavering American allies to reconsider cozying up to the Kremlin, cut the heart out of the booming American natural-gas industry, and likely increase American energy prices in the long term. Fewer LNG exports could also weaken the U.S. dollar, potentially triggering another round of nasty inflation by increasing the price of key imports to America’s industries, causing various production costs to rise.
The U.S. rose to become the world’s biggest exporter of LNG after a series of changes including a combination of hydraulic fracturing, or fracking, and horizontal drilling in the Barnett formation in Texas flipped the U.S. from an LNG importer to exporter. American LNG exports became competitive against Russian gas in Europe, and demand grew following the Russian invasion of Ukraine.
“U.S. LNG exports have served as a vital lifeline for countries in Europe and across the Globe,” 26 Republican U.S. senators wrote in a letter objecting to the ban. “Without U.S. LNG exports, European leaders would have to decide between depriving their own citizens of energy or actively funding Russia’s war on Ukraine. Moreover, in December 2023, Russia exported LNG at record levels. Russia is also in the process of dramatically expanding its future LNG export capacity.”
“LNG exports from the United States are also uniquely suited to decrease global emissions,” the letter continued. “Both China and India, two of the largest polluters globally, are top destinations for U.S. LNG exports. Efforts to limit the export of LNG from the United States thus directly undermines the ability to reduce emissions through the use of clean-burning natural gas.”
Despite these strategic and environmental advantages, the Biden administration has opposed LNG due to pressure from the environmentalists who make up a disproportionate percentage of the Democratic Party’s donor class. The New York Times reported that leftist social-media influencers and environmentalists motivated Biden’s natural-gas freeze. “Ahead of the decision, White House climate advisers met with activists like Alex Haraus, a 25-year-old Colorado social media influencer who has led a TikTok and Instagram campaign aimed at urging young voters to demand that Mr. Biden reject the project,” the New York Times wrote.
When asked to detail how banning LNG exports would reduce greenhouse-gas emissions, Biden’s climate adviser admitted that he could not, in what can only be described as a word salad. The Environmental Protection Agency’s own methodology shows the action will have virtually no effect on global temperatures. Its models show a decline of a mere 0.013°C by 2100. That’s a number so small that the government admits it would not be detectable.
The ultimate effect of this decision on America’s allies will be quite detectable, however. When Russia invaded Ukraine in February 2022, Europe was thrust into an intense energy crisis, as major economies like Germany relied heavily on Russian gas. Prices surged by a stunning 3,376 percent as a result. When Ukraine didn’t immediately collapse, the Kremlin pinned its theory of victory on Europe running out of energy. Russian propaganda depicted the continent freezing over and relying on pet hamsters to generate electricity . . . then starving to death and eating the hamsters.
Pre-war, Russia was supplying nearly 45 percent of Europe’s gas. Putin tried to use natural gas as leverage, threatening the continent with a crippling gas shortage. But American energy saved the day. “Putin calculated that he could use the gas weapon to shatter the coalition supporting Ukraine,” energy historian Daniel Yergin told Bloomberg. “It failed largely because of LNG.” Now countries within the American alliance network will be forced to go outside the alliance for the LNG, likely seeking it from Russia again. The Biden administration wrongly claims this will not impact America’s allies because it simply prevents new exports, not existing ones. This is incorrect, because demand for LNG in America’s allies is expected to rapidly rise. Therefore, new authorizations are inherently necessary to meet projected demand.
Europeans know well just how dependent their economies are on the possibility of importing U.S.-produced LNG. Before the 2014 Russian invasion of Crimea, Poland imported 60 percent of its natural gas from Russia while Europe got about half of its imports from the country. This dependence prevented many of America’s European allies from responding more forcefully to Russian actions in Syria and Ukraine. Russia used interruptions in the natural-gas supply in 2006, 2009, and 2015 to put political pressure on Eastern European countries like Ukraine, Poland, and the Baltic states.
“The first full year [2023] of Poland’s independence from natural gas supplies from the east [Russia] is behind us,” Daniel Obajtek, president of the Polish energy company ORLEN, told CEEnergy earlier this month. “LNG confirmed its role as one of the pillars of the country’s energy security system. The record number of cargoes of liquefied natural gas received by the ORLEN Group is the result of investments that will be continued in the coming years.”
Last year, Poland received a record-shattering 41 LNG shipments from the U.S., more than twice the 19 it received from second-placed Qatar. U.S. gas soon eclipsed remaining Russian deliveries and now accounts for more than half of Europe’s LNG imports, a share widely expected to continue growing before Biden’s decision, as U.S. exports were the most flexible in the world.
Selling LNG to Europe has huge economic benefits for America, according to a Department of Energy study. Other research suggests exporting U.S. LNG would create 136,000 jobs and generate $145 billion in economic activity nationwide (the average permanent job at a U.S. LNG export facility has a total compensation of $110,000). America led the world in LNG exports in 2023. That amounted to $54 billion for U.S. companies in 2023.
Prior to Biden’s decision, America’s allies had an alternative to Moscow, one that gave Europe a desperately needed lifeline while helping the American economy. As National Review’s editors pointed out yesterday, LNG is going to be used; it is better for our economy, Europe’s national security, and the environment that other countries use ours. Biden has now placed that all at risk.