What next for US LNG Exports?
The Biden administration has been coming under increasing pressure from environmental groups and the left of the Democratic Party to stop new US LNG export projects on “environmental” grounds. The pause on non-FTA LNG export approvals, hastily announced on January 26, suggest they have succumbed to this pressure. The practical impact of this is that all pending applications will not be approved, or otherwise, until after the presidential election on November 5th, or more likely until after the inauguration of the new president in January 2025. Some 50 mtpa of US and Mexican projects, which were likely to come on in the next five years, would appear to be at risk if this pause turned into a longer or permanent ban. While this is not thought to be a likely outcome, with approvals more likely to resume next year, the impact could be a significant tightening of the global gas market. This potential tightening could lead to other projects being developed to replace the lost US/Mexican ones and Russia would be well placed to step in. It would be the ultimate irony, if the actions of the Biden administration in pausing non-FTA approval on LNG export projects, simply resulted in more Russian LNG and/or pipeline gas being exported to Europe and elsewhere.
