I’ll quote this passage again from NRO’s editorial on the Biden administration’s liquefied natural gas export “pause”:
Here’s reality: LNG is going to be produced. It is going to be sold on the global market. It is going to be used. Those things will happen whether new export terminals are built or not.
I mentioned who those sellers of LNG might be in an earlier post, but they include Qatar (which is massively increasing production capacity) and Russia. Those nice folks in Saudi Arabia are taking a look, too.
Meanwhile, via Bloomberg:
Asian liquefied natural gas buyers have begun looking for alternatives to offset potential delays to US projects hit by a moratorium on new approvals, in a potential boost for rival exporters.
Buyers, including those in major importers China and Japan, are reviewing options including new talks with already-licensed projects in the US or suppliers from other nations, according to people with knowledge of the matter.
While the consumers aren’t proposing to break any existing contracts, some of which are binding, they are looking to have alternatives in place in case the US pause on approvals leads to major delays, said the people, who requested anonymity to discuss private deliberations.
Japan’s Trade Minister Ken Saito said Tuesday that his nation would take the necessary steps to ensure energy security amid concerns about delays to future US production. Jera Co., Japan’s biggest LNG importer, said in response to questions that even a temporary pause to new licenses for US projects could cause concerns for global energy energy security, given its importance as a supplier.
If the “pause” becomes permanent, the LNG will, as the editorial writers point out, still be bought somewhere. That means that the U.S. will have (a) thrown away export revenues and jobs, (b) weakened its credibility with its allies, (c) squandered an opportunity to increase its influence with countries that are . . . less friendly, and (d) handed extra profits to countries less likely to let TikTok influencers influence their energy policy. Sheer brilliance, I tell you.
Press reports say Biden adviser John Podesta pushed for the “pause”—which tees up an outright ban—after TikTokers and [climate lobbyist Bill] McKibben made stopping LNG exports a cause celebre. Mr. Biden’s advisers at the White House even met with a TikTok climate “influencer.” The Administration hopes its climate gesture will boost the President’s flagging political support among young people.
Who cares about the real-world impact, or the signal to allies and adversaries that the U.S. isn’t a reliable partner? Europe and Asia should plan to import their gas from Qatar, Russia or even Iran. Xi Jinping and Vladimir Putin now know they can exploit the Administration’s climate obsession to undermine U.S. interests.
Even if the administration stops the pause and resumes issuing new export permits, the perceived reliability of the U.S. as a supplier will have taken a knock. That will come with geopolitical and economic costs. U.S. producers will also have to factor in increased domestic political risk before proceeding with new projects, making them less likely to go ahead, thereby adding opportunity costs to the costs that even a pause will leave in its wake.
Meanwhile, Canada has spotted a business opportunity, while claiming, naturally, that its LNG is far, far cleaner than anything that grubby Americans could come up with.
US President Joe Biden’s decision to pause approvals of new licenses to export liquefied natural gas will create opportunity for Canada’s sector, Energy Minister Jonathan Wilkinson said Tuesday.
His understanding is that Biden is attempting to integrate climate considerations into America’s LNG export policy. “Canada has been doing that now for several years,” Wilkinson told reporters after a cabinet meeting in Ottawa. . . .
While the US has transformed itself into an LNG export powerhouse over the past decade, Canada has moved much more slowly, in part due to its more restrictive climate policies.
But multiple west coast export terminals are expected to come online over the next few years, including LNG Canada, a large facility backed by Shell Plc, Mitsubishi Corp. and PetroChina Co. that is nearing completion. A potential second phase to LNG Canada is still pending a final investment decision.
Two other smaller export terminals, Cedar LNG and Woodfibre LNG, have also been approved for construction.
Remind me again how the administration’s decision is going to make any difference to the climate.