Experts Tell House Subcommittee LNG Pause Could Have Major Economic and Environmental Impacts

President Biden’s LNG pause has amassed a range of negative reactions and concerns from across the political spectrum.  

In a House Subcommittee on Energy, Climate, and Grid Security hearing this week, members from both sides of the aisle agreed that Biden’s decision, directly and indirectly, affects the U.S. economy, energy security, global emissions reduction goals, and sends a message of instability to our allies – a move that many of them also labeled as win for Russia. 

The subcommittee heard from experts that could speak on the real short-, medium- and long-term impact of the moratorium for the United States, its allies and the rest of the world, with several members emphasizing the importance of the flourishing U.S. LNG industry, particularly during times of geopolitical tension. They highlighted how it has not only positioned the United States as the largest global LNG exporter but also strengthened America’s energy security, created jobs, reduced energy prices domestically, and lowered emissions globally. 

Rep. Jeff Duncan (R-SC) stressed in his opening remarks: 

“US LNG exports could support up to 452,000 additional American jobs and add up to 73 billion to the US economy by 2040. They can also create billions of dollars in revenues from federal, state and local governments.”  

A Blow to the U.S. Economy and Jobs 

Several speakers illustrated the importance of LNG export facilities for job creation and local economic development. The construction and operation of these facilities provide both permanent and temporary employment opportunities, benefiting local communities and the broader U.S. economy.  

Rep. Cathy McMorris Rodgers (R-WA) commented: 

“Pennsylvania alone, the natural gas industry supported 41.4 billion in economic activity, the shale gas development supported over 120,000 jobs. There are their similar experiences in states and communities across the country.” 

Eric Cormier, Senior Vice President of Entrepreneurship and Strategic Initiatives at the Southwest Louisiana Chamber Economic Development Alliance, remarked that the LNG industry has been part of the Southwest Louisiana economic tapestry since 1981:  

“The LNG industry alone has contributed a total of $34 billion investments across the region, creating thousands of jobs and supporting local businesses.”  

The LNG industry has become vital to Louisiana as the state has recovered from several natural disasters the past decades. 

Supporters of the ban argued that increased LNG exports affect domestic energy prices and U.S. consumers. However, this argument was refuted by both Rep. Lizzie Fletcher (D-TX) and EQT Corporation President and CEO Toby Rice. Rep. Fletcher pointed out that LNG exports do not affect domestic prices, while Rice used the similar scenario that has played out with pipeline delays and cancellations to show how these efforts drive domestic prices up:  

“I think the biggest concern with the pause on LNG exports is that this is the start of the playbook to block American energy infrastructure. And this playbook has been used successfully to block pipelines. And that has been incredibly destructive and caused unnecessarily high energy prices in America.” 

Putting Domestic and Global Energy Security at Risk 

House members and witnesses also highlighted the significant national security implications of the moratorium, explaining that a disruption in LNG exports could have consequences for U.S. allies who rely on American natural gas to reduce their energy dependence on less friendly nations like Russia. 

Rep. Rodgers emphasized:  

“In December 2023 alone, 61% of U.S. LNG exports went to Europe, keeping their homes heated, their businesses running, and their lights on… U.S. exports spurred our European allies to quickly invest in new LNG import facilities to further wean themselves off Russian natural gas. This decision to ban exports is a gift to Putin. We all know Putin is using energy as a weapon. This is giving the Russians greater leverage over our allies while further funding their evil activities, including aggression against the Ukrainian people.” 

Suffocating a Flourishing Industry  

Proponents of the ban argued that there would be no immediate impacts on the LNG industry and facilities that are currently approved. However, once again, the argument was refuted, as the decision will undoubtedly create market volatility and uncertainty both in the United States and around the world. Countries in Europe, Japan and Canada have already expressed their concerns of what this ban could mean for global energy markets and called upon Biden to reverse this decision.  

Rep. Mariannette Miller-Meeks (R-IA) emphasized: 

“The reason why it affects now and not in the future is capital investment in the industry. If an industry knows it’s being shut down – the intensive capital investment that is needed –  will not be put in place.” 

Environmental Concerns 

One of the most significant concerns raised during the hearing is the potential increase in global emissions that could result if less U.S. LNG is available on the global market. U.S. LNG is considered the cleanest in the world, making it a valuable tool for reducing emissions worldwide. Blocking these exports could force countries to rely on supplies from less environmentally conscious nations and could hinder international efforts to transition away from dirtier energy sources, and instead see them ramped up to meet energy demands.  

The Department of Energy (DOE) has explained that its own research demonstrates the climate benefits of U.S. LNG: 

“Both the 2014 and 2019 analysis concluded that that the use of U.S. LNG exports for electricity generation in European and Asian markets will not increase GHG [greenhouse gas] emissions from a life cycle perspective, when compared to regional coal extraction and consumption for electricity generation.” 

Source: American Petroleum Institute 

Bottom Line: 

The House hearing revealed the severity of the consequences the administration’s LNG export permitting pause could have on the U.S. economy, environment, and global energy security. The U.S. LNG industry has not only brought significant benefits to our country, supporting federal, state, and local economies, creating jobs and development across our nation, but it has also been a step forward in our global climate goals. 

This pause places a flourishing industry under unnecessary burden and at risk of losing significant investment. It also sends a message of uncertainty and unreliability to the world, and most importantly, to our allies. In times of increasing global natural demand, decreasing the availability of U.S. LNG on the global market will not prevent Europe or Asia from needing a reliable energy source to keep their lights on – they will still have to get that energy somewhere. 

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