A federal judge on Monday ordered the Biden administration to resume issuing permits for new liquefied natural gas export facilities after the government paused the process in January to analyze how such exports would affect climate change, the economy and national security.
The decision by the U.S. District Court for the Western District of Louisiana came in response to a lawsuit filed by 16 Republican state attorneys general, who argued the moratorium amounted to a ban that would harm their states’ economies. Many of those states, including Louisiana, West Virginia, Oklahoma, Texas and Wyoming, produce significant amounts of natural gas.
Judge James D. Kaine Jr., appointed by President Donald J. Trump, wrote in his ruling that the state has proven it has lost jobs, royalties and taxes that would have been generated if the gas export permits had continued.
Texas, for example, projects that the permit suspension will result in $259.8 million in lost tax revenues related to natural gas production over five years.
Energy Secretary Jennifer Granholm said the agency's analysis of LNG exports is expected to be completed by the end of the year.
But Judge Kane agreed with the attorney general that the state was suffering harm.
“The court found that the loss or delayed revenue associated with natural gas production was a specific and imminent injury that supported standing to sue,” Judge Kane wrote.
“Natural gas liquids have a tremendous and positive impact on Louisiana, providing clean energy around the world and good jobs here at home,” Louisiana Attorney General Elizabeth Murrill said in a statement. “Louisiana residents are proud to power this state and the world. This is a huge win for American energy.”
The Biden administration decided in January to halt approval of new liquefied natural gas facilities after climate activists campaigned against Calcasieu Pass 2, a proposed $10 billion project in Louisiana. Once completed, Calcasieu Pass 2 would be the largest natural gas export terminal in the U.S. and would increase the nation’s daily gas exports by about 20%. Last week, the Federal Energy Regulatory Commission approved the project in a 2-1 vote, leaving export terminal permits as the last remaining hurdle.
The suspension also affected five other projects that were set to export gas to countries with which the United States does not have a free trade agreement. Despite the temporary suspension, the United States plans to nearly double its export capacity by 2027 thanks to projects already licensed and under construction.
The United States is the world leader in LNG exports. The country has seven active terminals, five approved facilities under construction, and 17 additional projects are seeking approval.
The protests over Calcasieu Pass 2 come as President Biden seeks to build support among climate activists, a key constituency. Despite Biden signing the most significant climate bill in American history, climate activists, especially young ones, are frustrated that his administration has approved oil drilling projects like Willow, a massive drilling project in pristine Alaskan wilderness.
When he announced the pause in January, Mr Biden claimed the decision was motivated by concerns about climate change.
“People across our country and around the world are feeling the devastating effects of climate change,” Biden said in a statement at the time. “This pause on new LNG approvals demonstrates that the climate crisis is the existential threat of our time.”
Environmental groups along Louisiana's Gulf Coast, where residents' health is affected by pollution from LNG facilities, want a blanket ban on new exports.
The suspension of permits has fueled opposition from oil and gas companies to Mr. Biden, according to industry lobbyists. Three oil executives held a fundraiser in Houston in May to support Mr. Trump, who pledged to resume LNG permitting.
The moratorium was announced a month after the U.S. joined nearly 200 countries at the United Nations climate summit in pledging to transition away from fossil fuels.
As countries seek to transition to cleaner energy, a complex debate is brewing over the role of LNG.
Natural gas, which is mainly composed of methane, is cleaner to burn than coal. However, methane is a much more potent greenhouse gas than carbon dioxide in the short term. And it can leak anywhere in the supply chain, from production wellheads to processing plants to stovetops. The process of liquefying and transporting the gas is incredibly energy-intensive, generating even more emissions.
Biden administration officials did not respond to requests for comment Monday night. But if the administration decides to appeal the decision, it is expected to be heard by the 5th U.S. Circuit Court of Appeals in Louisiana, where several Trump-appointed judges will hear the case. The court ruled in favor of plaintiffs who challenged Biden's environmental policies.