Senate should pass bill to stop Biden’s liquified natural gas export ‘pause’

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The Biden administration announced a pause last month on new approvals for liquified natural gas (LNG) exports to non-Free Trade Agreement (non-FTA) countries. The vast majority of countries, including most of Europe and Asia are non-FTA countries. This move by the administration would limit the future expansion of LNG exports to these nations.

This pause will have significant consequences for natural gas prices, both abroad and domestically, by creating uncertainty for producers that would negatively impact production. It would also force America’s allies to rely on gas from unfriendly countries, especially Russia. This comes at a time when many countries are trying to move away from Russian gas. The pause would make doing so more difficult.

Earlier this month, Rep. August Pfluger (R-TX) sponsored a bill to circumvent the pause. The bill, the Unlocking our Domestic LNG Potential Act of 2024, was passed  in a bipartisan manner, 224-200.

Presently, under the Natural Gas Act (NGA), the Department of Energy (DOE) approves LNG export permits, while the Federal Energy Regulatory Commission (FERC) is responsible “for the siting, construction, expansion, or operation of an LNG terminal.”

The new bill would remove the DOE from approving export permits while retaining FERC’s responsibility. In effect, this bill would remove import and export restrictions on natural gas.

This solution would simplify the governance of LNG exports under FERC’s authority, and would also render the Biden administration’s export pause moot by removing the permits that it is using to create a bottleneck.

The Senate should take up this important House legislation. Admittedly given the Democratic majority in the Senate, the upper house is unlikely to take up this bill. Yet the bipartisan vote in the House should mark this as a crossover issue.

Regardless, the bill’s passage in the House is a good sign of legislator interest in maintaining the freedom of natural gas producers to export. The bill text will also be useful in the next Congress.

Natural gas exports are essential to maintaining US dominance in the natural gas space, and keeping domestic prices low.