9 months ago
President Joe Biden’s decision to limit the explosive growth of U.S. natural gas exports has flipped the traditional partisan arguments about fossil fuels.
Republicans are attacking the move as a setback for the international fight against climate change, saying it will make it harder for other countries to replace their dirty coal supplies with cleaner-burning American gas.
Democrats, meanwhile, praise it as an America First victory for U.S. consumers — saying Biden’s pause on new permits for sending gas shipments overseas could mean more fuel and lower prices for the domestic market.
The clashing messages are an example of the novel controversies being created by the United States’ emergence as an energy superpower — a role that has enhanced its leverage in conflicts such as the Russia-Ukraine war but also set up a collision between soaring U.S. oil and gas production and the president’s pledges to slash climate pollution. The arguments cherry-pick from claims that each side has made before, though their core positions remain unchanged: Republicans favor increased U.S. fossil fuel production, while Democrats' climate policies are aimed at moving the country away from gas and oil.
Biden’s action in late January, which is likely to freeze new gas export permits for at least 15 months, comes after two decades of a gas boom that has turned the country into the world’s biggest exporter of the fuel.
Biden’s initial statement on the freeze highlighted the need to address climate change, saying failure to act would mean “condemning the American people to a dangerous future.”
But the administration’s more recent comments, including congressional testimony last week by Deputy Energy Secretary David Turk, have also emphasized the economic argument.
Turk told the Senate Energy and Natural Resources Committee that the administration’s review into whether new natural gas exports are in the national interest will look at both the climate impact and whether the growing share of U.S. gas production going overseas would cause domestic prices to rise. U.S. natural gas prices have been far below those in Europe and Asia for years, mainly because the United States has such ample gas supplies.
“It makes me very nervous when our independent data nerds tell us prices are going to converge [with world prices] if we export more and more volume,” Turk said. "Congress has given us the responsibility to look at the public interest, especially how this impacts U.S. consumers, U.S. farmers and U.S. manufacturers."
Exports of liquefied natural gas consume 14 percent of total U.S. gas supply. Even with Biden’s freeze in place, that percentage could double by the end of the decade because of new plants that already have federal permits in hand.
Alaska GOP Sen. Lisa Murkowski called the administration's pause "a stunt" that she worried would shake foreign allies' faith that the U.S. would continue to supply gas to replace coal-fired power plants and reduce greenhouse gas emissions. GOP lawmakers have previously touted natural gas exports as a tool for lowering global climate pollution, arguing that U.S. gas is cleaner than gas from countries such as Russia.
Republican Sen. Bill Cassidy of Louisiana, whose state is home to much of the gas export industry, said any curbing of U.S. gas shipments to China could result in more pollutants from that country blowing across the Pacific and harming West Coast air quality. (China was one of the top destinations for U.S. gas before the war in Ukraine drew more of those supplies to Europe.)
"This is a war on air quality in California," Cassidy said at the hearing. "Not giving the Chinese the ability to convert from coal to natural gas is going to make somebody have an asthma attack somewhere in the Bay Area."
For Democrats, leaning into the argument that exporting an increasing share of gas would drive domestic prices higher may resonate with voters, said Danielle Deiseroth, executive director of the liberal polling firm Data for Progress. Research her organization did last fall showed support for keeping energy at home as a reaction to higher energy prices.
“I think there could be some voters who may not view climate change as a huge priority and who can be persuaded by messaging that is focused on prices and keeping supply at home,” she said.
Liberal groups are also rushing to take the economic message to swing states. Protect U.S. Families, an organization formed to build support for the export permit pause, said it was buying television and internet ads in Michigan and Pennsylvania to argue that a curb on new gas exports would bring “benefits to consumers and our national security.”
Sen. Angus King of Maine, an independent who caucuses with Democrats, has pursued that argument for years. King said he's worried that forecasts for a doubling and possible tripling of exports could lead to the same problems that have plagued Australia, another major gas exporter, which saw its domestic prices rise so high the government there introduced price caps.
Democrats and environmental groups made similar arguments a decade ago in their unsuccessful fight to stop Congress and then-President Barack Obama from legalizing crude oil exports. "Crude oil produced in the U.S. should be used to lower prices here at home, not sent to the other side of the world," Sen. Bob Menendez (D-N.J.) said in a 2013 letter to Obama.
In the gas debate, Democrats have one key U.S. data point to help their argument: After a June 2022 explosion shut down one of the nation’s largest gas export sites, in Freeport, Texas, domestic prices that had been surging suddenly dropped 16 percent.
The Biden administration’s freeze on new export permits will allow it to look at how U.S. prices will respond to the rapid growth in exports in recent years. "This pause is an opportunity to do those kinds of studies, and it's not the end of the world because it doesn't affect any of any projects that are already in the pipeline," King said.
Charlie Riedl, head of the Center for Liquefied Natural Gas trade association, countered that the Democrats’ math is at odds with reality. Natural gas production has steadily increased with exports, keeping a lid on prices, he said.
Natural gas prices spiked in 2022 after the pandemic as the economy rebounded faster than drills could return to the field, but have since settled into levels below $3 per million British thermal units — well below levels that typically hovered above $5 before the fracking boom in late 2000s. Even as natural gas demand reached a record high last month, domestic prices have fallen amid higher supply.
"This is one prime example of our industry’s ability to balance itself, largely through boosted production rather than government intervention," Riedl said in a statement.
House Democrats have also focused on the economic argument. At a House Energy and Commerce Committee hearing Feb. 6, Rep. Ann Kuster (D-N.H.) said she believed the growing volume of exports “increased domestic gas prices, driving up the cost of cooking, heating and electricity for U.S. consumers and businesses.”
Other Republicans have settled on a more blunt strategy — falsely portraying the pause on new permits as a “ban” on exports. Rep. Jeff Duncan (R-S.C.) used that language as he highlighted a letter in which House Republicans told the White House its review was “economically and strategically dangerous and unnecessary.”
“The Biden administration has weaponized this review to pursue climate objectives,” Duncan said at the Energy and Commerce hearing. At the same time, he argued, “a ban on U.S. LNG exports will increase global emissions.”
The administration has sought to allay economic and security concerns about the permits pause, especially from allies in Europe worried about a potential hobbling of their U.S. energy lifeline. A key part of their message: This pause is temporary.
“I've found that our allies who raise these issues with me tend to be quickly reassured when you explain to them what this is, which is a pause, and what it isn't, which is a moratorium or a reversal," Geoffrey Pyatt, the State Department’s top energy official, told reporters last week.
But climate advocates say they hope Biden will make the freeze permanent if he wins a second term. Otherwise, they say, the industry’s growth threatens to lock in decades of new fossil fuel use.
Supporters of Biden’s freeze haven’t abandoned their climate-based arguments, of course. In fact, green groups say it’s long overdue for federal regulators to take a closer look at the greenhouse gas emissions that come from drilling gas, cooling it into a liquid form and shipping it around the globe in massive tankers.
“The real concern is the emissions,” Sen. Sheldon Whitehouse (D-R.I.), a longtime climate hawk, said at a recent news conference in the Capitol. “The pause will give us a chance to prove the point that he has been so actively championing.”
But figuring out exactly how halting exports would affect global climate pollution is a complex riddle involving many variables.
That includes scientific challenges such as reconciling various estimates of how much heat-trapping methane leaks into the atmosphere throughout the natural gas supply chain. It also covers market uncertainties ranging from regional electricity prices to assessing whether gas would simply displace dirtier coal — or, instead, thwart increasingly affordable, zero-emissions renewable power.
“It's a complicated analysis,” said Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University and a former senior director for energy and climate change in the Obama White House’s National Security Council. “I don’t know what the outcome will be.”
Switching to gas from coal during the past decade is one reason U.S. greenhouse gas emissions fell 17 percent below 2005 levels in 2021, according to the Environmental Protection Agency. The oil and gas industry has touted gas’ climate benefits relative to coal, contending it emits half the amount of carbon dioxide when burned for electricity.
But allowing inexpensive gas to supplant wind, solar or other renewable power sources would contradict a pledge the U.S. and nearly 200 other nations signed during last year’s U.N. climate summit, promising to limit the rise in the Earth’s temperatures by transitioning away from oil and gas, climate advocates argue.
“We believe that if this review is done correctly that it would end the rubber-stamping of these [gas export] projects,” said Mahyar Sorour, director of the Sierra Club’s Beyond Fossil Fuels Program.
A permanent stop would bring political risks for Biden, who has invited a battle by picking on the darling of the oil and gas industry. Oil and gas companies have billed natural gas as a “bridge” fuel that will ease the transition from dirty-burning coal to clean power.
“I cannot imagine a worse conceived idea that is more detrimental to decreasing world greenhouse gas emissions” than holding back new gas shipments, Rep. Debbie Lesko (R-Ariz.) said during a House Energy and Commerce Committee hearing. “President Biden claims he wants to reduce emissions. Banning LNG exports does the opposite.”
Green groups and many Democrats are not buying that. They point to a rising tide of climate warning signs such as wildfires, record-hot temperatures and increasingly powerful hurricanes, and suggest that recent science shows that the warming potential from the production, transportation and burning of natural gas has been understated.
“We are trying to influence them to do a deeper set of analysis,” Leah Donahey, senior federal advocacy campaigns director with the League of Conservation Voters, said, referring to the Biden administration. “They are already listening to that. And we are going to continue to be very loud publicly.”
In a letter to House Speaker Mike Johnson and Minority Leader Hakeem Jeffries, dozens of environmental groups wrote that the federal process for assessing whether exports are in the public interest needs updating. They said approving 20 pending export facilities would greenlight the climate pollution equivalent of 681 coal-fired power plants or 548 million cars.
“The pause is for the purpose of bringing sound analysis to bear based on the impacts on climate, the impact on families, because export facilities drive up the cost to American families and the impact to our frontline communities,” Sen. Jeff Merkley (D-Ore.) told POLITICO. “Those are absolutely the right things to bring to the conversation.”
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