Episode Info
- Season23
Hosted by Christina Ruffini and Sir Richard Dearlove
Guests
Timothy Gardner
Timothy Gardner is a Reuters journalist discussing the Biden administration's pause on proposed liquid natural gas export projects.
Ben Lefebvre
Ben Lefebvre is a POLITICO journalist discussing the Biden administration's pause on proposed liquid natural gas export projects.
Zachary Budryk
Zachary Budryk is a The Hill journalist discussing the Biden administration's pause on proposed liquid natural gas export projects.
Episode Summary
The team behind the top global affairs podcast, One Decision, brings you "Power Decisions," a new energy series that explores the world's energy sources and the politics and power behind the clean transition. At the beginning of a critical election year in the United States, the Biden administration made waves when it announced a pause on proposed liquid natural gas export projects in the US. In 2023, the US became the number one exporter of LNG—surpassing previous global leaders in the industry. American LNG exports have helped Europe keep the lights on as the war between Ukraine and Russia severed other energy sources. But President Biden, in keeping with his climate commitments to younger voters and green groups, announced the pause while his administration conducts public interest reviews on future projects. Guest host and journalist Liz Landers convenes a roundtable of energy reporters: Timothy Gardner of Reuters, POLITICO's Ben Lefebvre, and The Hill's Zachary Budryk. They discuss the reasons behind the Biden administration's decision, the reaction from the European Union and other nations relying on US LNG exports, impacts on US national security, and how the decision could affect the clean energy transition.
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Transcript
INTRODUCTION
Landers: Welcome to Power Decisions, the energy series that explores the world's energy sources and the politics and power behind the clean transition. I'm journalist and correspondent Liz Landers, and I'll be your host today. NEWS CLIP [0:14] The United States will withdraw from the Paris climate accord. We can't build a future that's made in America if we ourselves are dependent on China for the materials, the power, the products of today and tomorrow. We must look for ways and ensure the inclusion of the role of fossil fuels. This is a pivotal moment. Our action collectively or worse, our inaction will impact billions of people for decades to come.
Landers: In January, the Biden administration announced a pause on proposed liquid natural gas export projects in the US. In 2023, the United States became the number one exporter of LNG, more than Qatar or Australia. American LNG exports have helped Europe keep the lights on as the war between Ukraine and Russia severed other energy sources. But President Biden, in keeping with his climate commitments to younger voters and green groups, announced the pause several weeks ago while his administration conducts public interest reviews on future projects. We've assembled a great roundtable of reporters. Joining us today are three reporters with decades of experience covering energy policy. Tim Gardner is a reporter for Reuters. Ben LeFave is an energy reporter for POLITICO. And Zach Budrick is an energy and environment reporter at The Hill. Thank you guys for joining us. I wanted to start with you, Ben. Tell me about this decision. Why did the Biden administration decide to put a pause on these liquid natural gas exports?
THE DECISION AND ITS RATIONALE
Lefave: There's two reasons, and I think you can argue which reason takes precedent, but there's a political reason and a kind of government regulation reason. The regulation reason is basically the US LNG industry has just gone gangbusters since kind of starting out in the lower 48 in 2016, where we're shipping increasing amounts of gas overseas, and we're expected to do more. I mean, I was looking at on the Energy Information Administration website before this podcast. Right now, we're exporting about 10% of US natural gas overseas, and that's expected to double by the end of this decade. As demand has kind of dried up here, or it's not growing as much here, overseas markets is really where all this is going. And the Biden administration is saying, we need to take a pause. As all these new facilities come online, are we looking at the right things when we measure their climate impacts? Are we looking at the right things when we measure their domestic economic impacts? Basically, this is really, I don't want to say gotten out of hand, but this has really grown a lot faster than people expected. So maybe we need to tap the brakes a little bit for, you know, I don't know, a year or so and look at, you know, is this going where we want it to go? The other reason is after the Biden administration approved the massive Willow oil project in Alaska last year, and they needed to kind of say, well, you know, we had to do Willow because there's no legal reason we couldn't do it, but we've got a lot of people increasingly worrying about the impacts of natural gas on climate change. So we need to do something to show them that we're still on their side. And just as importantly, that our environmental allies have a win they can bring back to their own supporters and say, well, look, you know, you guys have been donating for years, you know, here's something we can bring home as a tangible. But the Biden administration said, you know, we need to look at whether we should continue with LNG exports at the same pace as we have.
DOMESTIC REACTION
Landers: International reaction and also the domestic reaction to this. Zach, let's talk a little bit first about the domestic United States reaction. I know that you are covering some of this from the Capitol Hill and lawmaker angle. What did you hear from lawmakers, from members of Congress about this decision when it came out a few weeks ago at the beginning of this year, 2024?
Budrick: Well, the Republicans in Congress have been fired up about this. The knives have been out on the Biden administration's energy policies in general, even as we are reaching all time highs for oil production under the Biden administration. But there's been some bipartisan criticism as well. Michael Bennet, Democrat of Colorado, has been fairly vocally disagreeing with this decision as well. And there are plenty of Democrats in Congress who are not necessarily in step with the Biden administration on energy environmental policy, but I would not call him a major voice necessarily. That tends to come from people like Joe Manchin.
Landers: Yeah. Manchin actually had a hearing about this decision not that long ago within the last few weeks. I saw Manchin said during that hearing, this decision was the wrong direction for our country. So so you're right. There are some Democrats who are out there who are not in agreement with the Biden administration's decision on this. I want to ask it and turn back to you, Ben, about the sort of international reaction as well. Because this decision, as you said, we're not using a lot of this liquid natural gas just here in the US. We're exporting it, it's actually played a really big role in this conflict between Russia and Ukraine. What were some of the EU allies saying about this? Are they concerned that they might not have energy supplies in the near future? What was kind of the reaction from some of our allies around the world?
INTERNATIONAL REACTION
Lefave: There was a public reaction, and then there's been more of a private reaction. The public reaction's being led by European businesses who have argued that, look, US LNG is one of the reasons that there's still a fight against Russia and Ukraine. I mean, as we remember, Russian President Vladimir Putin kind of bet that if they cut off gas, the Europeans would freeze in the winter and resolve to keep it going against Russia for Ukraine would kind of erode. But US LNG was key in keeping the gas fires burning in Europe at that time. But in the subsequent years, kind of helped out by mild winters, European gas inventory is full. And this kind of opened the door for environmental groups in the US and in Europe to say, we don't particularly need any more LNG. Thank you. I mean, we got our contracts for what we have. We don't need to add on to it. Going back to what Zach said about Republicans having knives out on this policy is they've been calling it a ban. And this was repeated all over the hearings. It's a ban. It's a ban. It's a ban. It's not a ban. It's saying, you know, everything that's in the production line will still go on. We're just not going to approve any new permits. The European Trade Association kind of played into that and said, well, if there's a ban on US gas, you're just going to force us back into the hands of Russia. Having said that, when you talk to some European government officials with the European Commission, they'll say this isn't a big deal, at least for them. I mean, they've got their own agenda. They want to move more towards clean energy. They feel they have sufficient contracts for gas already signed that they don't need any more. If you're going to take a pause out for eight months, you're fine. I will say that this has really scared the Japanese government officials, or I've heard from a number of them. They kind of took this almost as if they have never heard of domestic politics before, where it's kind of like I've had talks with some Japanese government officials who are like, this is going to shake the faith in the US LNG industry as being a reliable partner. And if they really go through and find that there's reason to stop new permits and LNG exports, I've told them, just speaking personally, I don't have any inside information on this, I don't see this resulting in any large scale ban of exports. There may be some kind of stricter regulations put in place, but I see this as, on one hand, the regulatory brake tapping that we talked about, on the other hand as being like domestic politics. And, you know, I mentioned a Japanese official, the same way that Japan had to figure out what to do about restarting its nuclear reactors is kind of the way this is playing out here on LNG exports.
Budrick: Could I piggyback on something that Ben said? It's spot on in terms of this being distinct from a ban, but I think you run into sort of a messaging challenge on the part of the Biden administration, and you had this as well when upon taking office, he stopped new leasing for oil and gas on public lands. Because on the one hand, that's distinct from an outright ban, so it's misleading for Republicans to call it a ban. But on the other hand, if you want something to tout to your allies in the environmental movement, you have to present it as there being a there there. You can't just say, yeah, this isn't really a big deal because it's not a full ban.
Landers: I think one thing that I read in some of your reporting, Ben, and I think you were just hitting on this point, Zach, was that this is kind of about the climate ambitions of the Biden administration. This president saying that he is going to make sweeping changes on the environment and addressing climate change versus his foreign policy agenda and kind of the limits on the US natural gas exports could limit US diplomacy. Do you see that as being a problem here?
Lefave: Not so much. I think at the end of the day, this is going to be almost an exact replay of the Biden's interior department's kind of pause on oil and gas leasing, where they did this pause for as long as they were politically able to do. And at the end, they said, we're still going to do oil and gas leasing, but we're going to raise the fees. We're going to limit the amount of land we're going to make available. But it's still kind of going on. I see this as them doing the same thing with natural gas exports. At the end of the day, they might say, well, you got to have this new technology to scrub the methane emissions or carbon emissions from the gas, but eventually we'll still let it go. And I think they're able to make that case diplomatically where they'll say the EIA has this list of projects that are under construction but already permitted for new exports, and that goes until 2028, even if, you know, just the way things are right now. So they can tell the EU, you're still going to have new capacity coming online for the next four years. And by that time, we'll have this study kind of finished, and hopefully there'll be actually no break in building. So I think they're able to peddle that as just kind of, we know what you may think this is going on, given all the sturm und drang about all this, but it's not going to result in you losing any cargoes.
Landers: The European Commission executive vice president met with Biden administration officials. And he said after that meeting, actually, that this would not impact US supplies to Europe for liquid natural gas over the next two to three years. But I do wonder though, what are the long term impacts for national security and for even the economy? Zach or Ben jump in.
Lefave: I think that largely depends on what the Ukraine Russia conflict looks like going forward. Clearly, Vladimir Putin did not expect it to play out as long as it has already. I think that first year of the conflict when the winter was particularly tough was really when a lot of the anxiety came in as our gas supply going to be enough. But we've had two years of mild winters. Given climate change, I don't necessarily think mild winters are going to be a thing of the past. So I think we can't really predicate European national security on this one policy move. I think if you saw the war continue for like, you know, five or six years, there might be questions, but then that's kind of like you're just getting outside of, you know, the accuracy of what you can forecast from this one policy move.
Landers: Right. Just a little bit more in terms of the geopolitical potential fallout from this decision. The United States is also dealing with conflicts across the Middle East. There are rising tensions in the South China Sea. I just wonder if you guys think that those other areas besides just this land war that's happening between Russia and Ukraine could also impact or be impacted by this pause?
Lefave: Yeah, it's been interesting. So the market has shifted. It used to be it all went to Asia, mostly Japan, China, South Korea. And then some of it would go to Europe. But with Europe, because Europe had been supplied by Russia, so they weren't a huge market for us. But when the big shift went to get away from Russian gas, the trade route basically shifted. I don't see these new conflicts coming into play, except I think there's a big question mark with, what do we do about exports to China? And that's been one of the interesting kind of side issues that's come up, where Democrats have really been pounding on this idea that, well, Republicans want to get tough on China. Why are we sending them cheap gas to help out their own manufacturing sector? Why don't we keep it at home and help out our own? So I don't know how much of this is an honest argument or just trying to score political points, but the beat has been increasing to kind of bring the amount of exports we're shipping to China into focus and raise a question of, you know, when is it too much?
POLITICS IN AN ELECTION YEAR
Landers: Tim, if you'd love to hop in, let's talk some about the political implications of this, especially because it is an election year in the United States. Will this decision assuage some of these green groups and climate change groups in the US? Because it sounds like a lot of these groups, and I know Ben, you've spoken with some of them before, the Sunrise Movement, Oil Change International, etcetera, that they want Biden to block all of this fossil fuel development and mining and using public lands for those kinds of projects. Do you think that this has made them feel better about what President Biden is doing on climate?
Lefave: Yeah. I think, you know, in the context of the Willow decision we mentioned earlier, I think for a lot of them, this brings the balance back to zero. I mean, it's funny. You ask them about the Inflation Reduction Act and all this money for clean energy. And that almost, for a lot of folks, at least on the ground, they either forgot about it or never really recognized it. But the Willow decision was like the big headline for them. So I think this kind of almost brings the ledger, the balance, to zero. There's an interesting debate of how much this is registering with the progressive and younger voters that the Biden administration wants to get back into their camp versus the war in Israel. We hear that a lot of, well, this would be great if you could just take it on its own, the LNG pause. But what's going on in Gaza is kind of sucking up all the oxygen. So I think that's become a bigger issue. The LNG thing is interesting in that, you know, when you ask people, what do you think is going to happen after this review? Do you think the administration is going to come out and say, okay, all of our calculations show that we need to just basically not approve any more LNG export projects ever? Or do you think it's going to go back to business as usual? And the politics is really interesting here, where you talk to some energy lobbyists, and they're scared to death that in November, the Biden administration is going to ban, actually will ban, LNG exports. Or if you talk to the environmental groups, you know, they'll say, I don't know. It's probably just we go back to business. So they get a little bit cynical. But yeah, it's still a little bit TBD on, I think, how powerful the politics of this end up.
Landers: Well, and the timing of this is also interesting too, because the deputy energy secretary David Turk testified about this on Capitol Hill. And he said that this is probably gonna take months, not years for this assessment and this pause to take place. So you're right that the pause could end sometime in November, sometime in October. I mean, Zach, jump in on this. You wrote a story about the White House climate advisor Ali Zaidi talking about this from the podium. He was basically asked point blank if the Biden administration made this decision to court these progressive voters.
Zaidi: He kind of didn't deny it. I think we've got to be clear eyed about the challenges that we face. The climate crisis is that, an existential crisis. And we've got to be, I think, really forward leaning into making sure that we're taking that head on.
Budrick: No. He didn't. I don't think that the Biden administration has been shy necessarily about having a close relationship with some environmental groups. I think to some extent, it's to their advantage to play that up, particularly in terms of trying to motivate youth turnout, especially with the support that the bombardment of Gaza may be costing them.
Gardner: Yeah. I mean, I'd agree with both Zach and Ben. It's a very, very, very careful balance. And you see that within the administration, that there's kind of divisions within the administration. There's the folks like Ali Zaidi, who have John Podesta, who have climate in their portfolios. And then there's like energy security people who are conscious that the US supplied Europe when it needed with natural gas, LNG, right after Russia invaded Ukraine. And an EU official came to Washington just a few weeks ago, Maroš Šefčovič, and he said it's not a problem in the short term or the medium term for Europe, but he used this interesting term for what he considers the US as the global guarantor of energy security. And he went on to mention Asia, Latin America and Africa. If the US doesn't supply them, then they will turn to coal. So that's another thing that they're balancing. And of course, we're learning more about whether LNG is dirtier than coal. I mean, there's a debate there.
LNG, COAL, AND THE ENERGY TRANSITION
Landers: That's something that I wanted to bring too is this alternative of using LNG as part of the green energy transition and whether this could potentially slow down moving to greener energy sources in the future. And that is something that the Biden administration has hammered on and moving away from coal, moving away from oil. Is this potentially going to affect that transition?
Lefave: I think that's one of the things that the review during the pause is supposed to answer. I mean, I've talked to a number of people who are saying, well, look, we're finally getting widespread use of like real time measurements for methane emissions. And we didn't have that before. And in the past, it was companies would kind of use a calculation to say how much methane is leaking from their works. And now we can actually see it using various means. And they want to incorporate this into their permitting process that the DOE does. And one of the things we're seeing as well is every group and its grandma is racing to the White House with its own methodology of how you measure methane from these projects. And depending on which one of these methods that the DOE uses, they could say, well, look, this metric ton of LNG produced in the Permian Basin caused this amount of methane emissions. Then you get it on the ship to send it across the Atlantic, and that's got its own methane emissions tied to it. And so we can actually see, is it cleaner than coal? You're sending this LNG to Poland, and if Poland can grab coal from someplace close, what's the difference in the methane emissions? So I think this pause is partly to see, you know, can we incorporate these new measurements into our review?
Landers: Yeah, that export process that you're describing, it causes pollution. If the United States is exporting this from, let's say, Louisiana, where some of these projects are under consideration all the way to somewhere in Eastern Europe, it takes a long time to get it there. Tim, what do you think?
Gardner: Yeah. And you know, you mentioned David Turk, the deputy energy secretary, and, you know, he testified in the Senate about it. And I think at one point, mentioned that Japan has it's beginning to bring back its nuclear power plants. And he also mentioned to reporters after the event that when they talk with allies and partners, they see in many cases that demand for gas is going down in those economies. But Japan, it took down dozens of nuclear power plants after Fukushima in 2011. And it's uncertain how many of those are coming back. Like the biggest nuclear power plant in the world is in Japan, and it just got some initial approval to go forward, but it's still having problems within its local jurisdictions. So a lot will depend whether this pause pushes Japan to turn back on its nukes or not. And then, of course, the coal question.
IMPACT ON LOCAL COMMUNITIES
Landers: Ben, I had one final question too that I wanted to ask you because you have been talking to some of these communities on the ground. The projects that are currently on pause from what I've read are projects being considered in Louisiana and there are environmentalists who you spoke with about this. Why are they cheering on this decision from the Biden administration to pause these LNG potential export locations? What do they see as the impact on their actual communities?
Lefave: They'll tell you all about the flaring of gas that goes on. A lot of these LNG companies will say, we're one of the cleanest forms of energy around. But cleanest doesn't mean 100% clean. If you go to some of these facilities, they're pretty big. And they'll flare the gas that they can't be used. You know, in some extreme cases, like we saw with Freeport LNG in Texas, you know, the plant, which is relatively new, I mean, was one of the first LNG export plants around, but that was, you know, 2016, 2017, it had an explosion two years ago. These are industrial plants that have their own emissions. And so you talk to these people on the ground, and they'll tell you, you know, our respiratory health is suffering because of these. They're, you know, eating up more and more of our wetlands, you know, as the construction goes on. So they're concerned about the health and environmental reasons. They're basically saying, there has been an unmitigated rush to build these. We need to stop building them as fast as we can and think about the consequences of these facilities that are gonna last decades.
Landers: Thank you for adding that. I think that's just important for everyone to keep in mind too, you know, when we think about big policy ideas. Gentlemen, this has been really informative. I've learned a lot. Thanks for listening to our special energy series where we explore the world's energy sources and the politics and powers behind the clean transition. We'll drop new episodes here every month. I'm Liz Landers. See you next time.
