Sunday, June 16, 2024

The Incredible Dumbness of Biden’s War on LNG – Watts Up With That?

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Guest “You Can’t Fix Stupid, Part Deux” by David Middleton

FYI

  • LNG: liquified natural gas
  • DOE: Department of Energy
  • FERC: Federal Energy Regulatory Commission
  • Bcf: billion cubic feet
  • mcf: thousand cubic feet
  • mmBTU: 1 million British thermal units (~1 mcf)

The Old News

Biden pauses LNG export approvals after pressure from climate activists

By Timothy Gardner

January 26, 2024

WASHINGTON, Jan 26 (Reuters) – U.S. President Joe Biden on Friday paused approvals for pending and future applications to export liquefied natural gas (LNG)from new projects, a move cheered by climate activists that could delay decisions on new plants until after the Nov. 5 election.

The Department of Energy (DOE) will conduct a review during the pause that will look at the economic and environmental impacts of projects seeking approval to export LNG to Europe and Asia where the fuel is in hot demand.

[…]

Biden said in a statement: “During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment.”

The pause “sees the climate crisis for what it is: the existential threat of our time,” said Biden, a Democrat.

Administration officials vowed that the pause would not hurt allies, as it has an exemption for national security should they need more LNG.

[…]

Reuters

The Incredible Dumbness of Biden’s War on LNG

Biden’s pause of new LNG export approvals will have no effect on:

  • Bad weather (AKA climate change)
  • Short-term US energy prices
  • Global natural gas consumption

This has to be the most idiotic sentence in US presidential history:

My Administration is announcing today a temporary pause on pending decisions of Liquefied Natural Gas exports – with the exception of unanticipated and immediate national security emergencies. 

Let’s Go Brandon!

They paused the permit approvals for new LNG facilities. It can take ten years to go from permitting, to construction to loading up the first LNG tanker. This “pause” does not apply to currently operation LNG facilities or those under construction.

The Biden administration has paused new Department of Energy (DOE) approvals of proposed liquefied natural gas (LNG) export projects. This decision will not affect current export projects or those under construction.

Center for Strategic & International Studies

The Pause Violates the Natural Gas Act and Administrative Procedure Act

LNG 21 Mar 2024 | 23:01 UTC

Sixteen US states challenge White House ‘pause’ on LNG permits

Author Corey Paul
Editor Giselle Rodriguez
Commodity LNG

Louisiana, Texas and more than a dozen other Republican-led states sued the Biden administration March 21 seeking to overturn its suspension on issuing key new LNG export permits.

The lawsuit in a federal Louisiana court argued that the White House ran afoul of the Natural Gas Act and flouted the Administrative Procedure Act when it hit “pause” on the permits in late January. The suit, filed in the US District Court for the Western District of Louisiana by sixteen state attorneys general, names President Joe Biden, the Department of Energy and agency officials as defendants.

[…]

S&P Global

The Biden maladministration has lost nearly every oil & gas related lawsuit filed in Western District of Louisiana and the Fifth Circuit. The fact that the Natural Gas Act effectively requires the Department of Energy to approve LNG permits should make this one a piece of cake.

Under the Natural Gas Act, the DOE is required to approve such authorizations unless it finds that doing so would not be in the public interest.

Center for Strategic & International Studies

An American Industrial Success Story

APRIL 1, 2024

The United States was the world’s largest liquefied natural gas exporter in 2023

Data source: U.S. Energy Information Administration, Natural Gas Monthly, Cedigaz


The United States exported more liquefied natural gas (LNG) than any other country in 2023. U.S. LNG exports averaged 11.9 billion cubic feet per day (Bcf/d)—a 12% increase (1.3 Bcf/d) compared with 2022, according to data from our Natural Gas Monthly.

LNG exports from Australia and Qatar—the world’s two other largest LNG exporters—each ranged from 10.1 Bcf/d to 10.5 Bcf/d annually between 2020 and 2023, according to data from Cedigaz. Russia and Malaysia were the fourth- and fifth-highest LNG exporters globally over the last five years (2019–23). In 2023, LNG exports from Russia averaged 4.2 Bcf/d, and exports from Malaysia average 3.5 Bcf/d.

U.S. LNG exports increased in the first half of 2023 after Freeport LNG returned to service in February and ramped up to full production by April. Relatively strong demand for LNG in Europe amid high international natural gas prices supported increased U.S. LNG exports during the year. U.S. LNG exports set monthly records late last year: 12.9 Bcf/d in November, followed by 13.6 Bcf/d in December. We estimate that utilization of U.S. LNG export capacity averaged 104% of nominal capacity and 86% of peak capacity across the seven U.S. LNG terminals operating in 2023.

Similar to 2022, Europe (including Türkiye) remained the primary destination for U.S. LNG exports in 2023, accounting for 66% (7.8 Bcf/d) of U.S. exports, followed by Asia at 26% (3.1 Bcf/d) and Latin America and the Middle East with a combined 8% (0.9 Bcf/d).

In 2023, Europe (EU-27 and the UK) continued to import LNG to compensate for the loss of natural gas previously supplied by pipeline from Russia. Europe’s LNG imports capacity continued to expand, and we expect it will increase by more than one-third between 2021 and 2024.

The countries that imported the most U.S. LNG were the Netherlands, France, and the UK, with a combined 35% (4.2 Bcf/d) of all U.S. LNG exports. LNG imports increased in the Netherlands after the Gate LNG regasification terminal was expanded and two new floating storage and regasification units (FSRUs) were commissioned. Germany began importing LNG in 2023 when three new FSRUs were commissioned. We expect another four terminals (three of which are FSRUs) to come online between 2024 and 2027.

In Asia, Japan and South Korea each received 0.8 Bcf/d of LNG exports from the United States, the fourth- and fifth-highest U.S. LNG export volumes by country in 2023. Japan, China, and India increased LNG imports from the United States by a combined 0.6 Bcf/d compared with 2022. The Philippines and Vietnam started importing LNG in 2023; the Philippines imported LNG cargoes from the United States only in October and November.

In Latin America, U.S. LNG exports to Brazil continued to decline last year as Brazil continued to primarily use hydropower for electricity generation. U.S. LNG exports to Brazil peaked in 2021, when the country experienced its worst drought in more than 90 years.annual U.S. liquefied natural gas exports by destination

Data source: U.S. Energy Information Administration, Natural Gas Monthly
Note: Percentages shown denote year-on-year change in U.S. export volumes. Europe includes Türkiye.


Principal contributor: Victoria Zaretskaya

Tags: natural gas, international, exports/imports, United States, liquid fuels, Australia, LNG (liquefied natural gas), Qatar, Russia

US Energy Information Administration

Let this sink in: The United States oil & gas industry went from zero-point-zero LNG exports in 2016 to becoming the “world leader” in LNG exports (~14 Bcf/d) in 2023. This is akin to the New York Mets going from cellar dwellers from 1962–1968 to World Series champions in 1969… Or NASA going from JFK’s 1961 goal “of landing a man on the moon and returning him safely to the earth” before 1970, to Neil Armstrong’s “one giant leap” 84 days prior to the Mets’ World Series victory.

New York Mets? Moon landing? LNG exports???

Former Mets manager Casey Stengel had such low expectations for the still-fledgling Mets that he once said man would walk on the moon before the Mets win a championship. As Steven Marcus of Newsday aptly points out, Stengel was correct, but by only three months.

Metsmerized

“When those astronauts landed on the moon,” said Mets relief pitcher Tug McGraw, “I knew we had a chance. Anything was possible.”

Throneberry Fields Forever

The Amazing (or Miracle) Mets and Apollo 11 were examples of incredible achievements… Essentially going from startups to world champions in less than a decade. In less than eight years, the US oil & gas industry went from net importers of to the world champions of LNG exports. Putting the brakes on LNG exports would be as dumb as cancelling the Apollo program after its most successful mission, Apollo 17, or the New York Mets trading away a young Nolan Ryan for a washed up infielder in 1971.

Increased U.S. Natural Gas Exports” ≠ Higher U.S. Prices

We are able to export natural gas because we produce more than we consume. If natural gas exports were prohibited, we wouldn’t have excess natural gas production.

We did all this while actually driving prices down.

While short-term disruptions in supply and demand can trigger short-term upward and downward spikes in prices, as in 2022, prices were far higher when the US was a net importer, rather than exporter, of natural gas.

What would happen if the Biden maladministration did actually halt LNG exports? The US market would suddenly be oversupplied by almost 12 Bcf/d of production. This would cause natural gas prices to collapse, shale gas producers would slash production and oil producers would ramp up flaring of associated gas. The largest Marcellus producer recently announced production cuts due to natural gas falling below $2/mcf.

EQT Announces Strategic Production Curtailment

EQT Logo (June 2020) (PRNewsfoto/EQT Corporation)

NEWS PROVIDED BY EQT Corporation (EQT-IR) 

04 Mar, 2024, 05:00 ET

PITTSBURGH, March 4, 2024 /PRNewswire/ — EQT Corporation (NYSE: EQT) (“EQT” or the “Company”) today announced it made the strategic decision to curtail approximately 1 Bcf per day of gross production beginning in late February in response to the current low natural gas price environment resulting from warm winter weather and consequent elevated storage inventories. The Company expects to maintain this curtailment through the month of March and will reassess market conditions thereafter. Curtailments are expected to total approximately 30 to 40 Bcf of net production during the first quarter.    

[…]

PR Newswire

Other Marcellus and Haynesville operators have also recently announced production cuts.

Making Russia Great Again

API on LNG Permit Pause: A ‘Win for Russia’ and ‘Broken Promise to U.S. Allies’

WASHINGTON, January 26, 2024 – The American Petroleum Institute (API) today released the following statement from President and CEO Mike Sommers on the Biden administration’s announcement to pause approvals of new LNG export facilities, unnecessarily increasing project wait times at a time of geopolitical turmoil and rising coal use around the world. 

“This is a win for Russia and a loss for American allies, U.S. jobs and global climate progress. There is no review needed to understand the clear benefits of U.S. LNG for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels. This is nothing more than a broken promise to U.S. allies, and it’s time for the administration to stop playing politics with global energy security.” 

The announcement undercuts President Biden’s own pledge to send increased U.S. LNG supplies to our allies overseas to help end dependence on Russian gas. The pledge also committed the United States to “maintaining an enabling regulatory environment” for LNG.

[…]

American Petroleum Institute

Breaking News!

Energy Environment LNG Gas Energy

White House open to ending LNG export pause in push for Ukraine aid, sources say

By Jarrett Renshaw, Patricia Zengerle and Timothy Gardner

April 2, 2024

WASHINGTON, April 2 (Reuters) – U.S. officials are open to ending President Joe Biden’s pause on approvals of liquefied natural gas exports to get a Ukraine aide package passed in Congress but want to wait to see the entire proposal before making any decisions, two White House sources said on Tuesday.

Biden, a Democrat, in late January had paused approvals for pending and future applications to export the supercooled fuel after protests about the booming industry from activists concerned about its impact on climate change.

[…]

Reuters

I tend to think that the “sources” were just floating a trial balloon. This tradeoff doesn’t seem to make sense for anyone.

Conclusion

I stand corrected. This is actually the most idiotic sentence in US presidential history:

This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.

Let’s Go Brandon!

If the response to “the existential threat of our time” is to transfer future (beyond 2030) LNG sales from US companies to Russia, Qatar, etc… And they might be willing to trade the pause for another $95 billion for Ukraine… It just might not be very “existential.”

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