President Joe Biden recently announced a "temporary pause" on approving new LNG, liquified natural gas export facilities and private projects. The administration stated that the purpose of the pause is to conduct a comprehensive evaluation and review of the impacts of LNG exports on important, critical factors which include energy costs and energy security. The Biden administration claims to ensure that LNG projects are aligned with Americas energy needs while considering the broader implication of gas exports.
LNG exports can and frequently affect the complicated natural gas markets. As producers increase their LNG exports, the additional demand for domestic gas supplies may lead to the upward pressure on gas prices. One of the key pricing index areas is Henry Hub. AS LNG exports have historically grown over the past decade, natural gas prices have been stable, and at times have decreased. The large increase in daily domestic natural gas production has dampened the impact of LNG exports on pricing.
Energy security concerns have been raised by the administration. The Administration believes increased LNG exports would tighten domestic gas markets causing increased prices for consumers. The Biden Administration has adversely attacked the the fossil fuel companies since the first day in office It has been more difficult to permit gas wells on Federal leases, there are restrictions on Federal leases, restrictions on pipelines, and now the pause on LNG facilities permits. President has used these policies to appease the climate provocateurs and the "climate justice warriors" of the Democrat party. This is the basis for the Biden climate agenda and efforts to speed up the transition to "greener" energy sources. The "pause" is clearly an indication of the commitment to the environmental justice leaders of the party illustrating that the fight against climate change is a top priority.
LNG gas exports however play a significant role in America's energy future needs.
LNG exports contribute to economic growth by creating jobs in the industry and associated construction of LNG plants.
LNG exports illustrate the major role the U.S. has in global energy markets reducing dependence in politically unstable areas of the world.
Natural gas has been widely recognized as a cleaner alternative to other fuels. LNG exports to countries that rely on coal for electric generation can reduce carbon emissions in those areas.
JP Morgan's Jamie Dimon has called the Administrations energy transition policies wrong and enormously naïve and a political reason to pacify the climate warriors in the party. In fact JP Morgan has funded fossil energy projects to the amount of $434 Billion, more than any other institution. The bank believe LNG will be an economic positive for the U.S.
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