It was around 2007 that the United States teetered on the edge of being the world’s largest importer of liquified natural gas.
If you travel through time to 2024, the nation has become the world’s largest exporter of liquified natural gas, delivering 14 billion — yes, billion — cubic feet of LNG a day to other countries.
What happened?
The shale revolution came around after industry figured out how to pull shale gas from wells thanks to advancements in drilling, leading to an explosion in supply. An escalation of LNG exports began in 2017 and lasted into 2023.
“We are now very much in control of our own destiny as the largest producer of natural gas in the world, the largest exporter of LNG and we’ve become a cornerstone of of energy — of global energy security,” said Rob Jennings, vice president of natural gas markets for the American Petroleum Institute.
Jennings spoke during a webinar this week hosted by the Utah Petroleum Association, headed by Rikki Hrenko-Browning.
The two addressed President Joe Biden’s “pause” on any LNG exports to countries that are not in free trade agreements with the United States. That includes just about everybody, with the exception of a smattering of countries.
Jennings said Biden wants more environmental reviews and additional analysis of climate change impacts, which he asserts is a “been there, done that” type of study.
“We have not seen the Department of Energy exercise that authority until very recently. There were a couple of approvals in the wake of the Russian invasion of Ukraine, but we saw a long pause starting around the beginning of 2023. We call that the shadow pause because there wasn’t actually a policy in place,” Jennings said.
The idled 745-mile pipeline under the Baltic Sea
A pipeline called Nord Stream 1 from Russia to Germany has been a critical component in the European Union’s energy portfolio. But in 2022, after the Russian-Ukraine war began, Russia started reducing gas supplies for a number of months.
In June, it cut deliveries through the pipeline by 75% — from 170 million cubic meters of gas a day to roughly 40 million cubic meters — according to a BBC report.
In July, Russia shut it down for 10 days and by August it was completely shut down, after which there were a series of explosions.
That forced the European Union — despite many member countries having net zero goals for emissions — to turn to the United States for LNG exports.
“So Europe has very much been on the leading edge on their push to decarbonize their economy. They’ve done a lot in the power sector and brought on a lot of renewables. But the fact of the matter is they still use about 40 billion cubic feet per day of natural gas in the European Union alone. And that doesn’t count Turkey; that doesn’t count the United Kingdom,” Jennings said.
He added that the results of the idled pipeline drove much of the U.S. exports of LNG to Europe as it struggled to meet energy demands.
Some countries saw the pipeline as a testament of the need to go carbon free and wean entirely from fossil fuels, while others felt it drove home the reality to shore up supplies to keep the lights on.
But the official “pause” by Biden announced in January has that all curtailed. In April, Utah Gov. Spencer Cox joined with 24 other governors across the country to call for end to the pause in a letter to the administration. That came after the federal government’s decision to idle the approval of what would be the nation’s largest LNG export terminal in Louisiana and pause LNG exports to countries that lack free trade agreements with the United States.
“The U.S. is the world’s leading exporter of LNG, and the decision to pause new approvals undermines our economic and national security, and the security of our allies,” they wrote. “It creates instability and threatens future energy security throughout the world at a time when our allies need us the most. It sends a message that the U.S. is not a reliable energy partner.”
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Jennings said the pause is curious in light of emission reductions that have been made in the United States — due to the switch from coal to natural gas as an energy source.
“One of the things that we’ve seen over the past 18 years in this country is our carbon dioxide emissions in the power sector are down more than a billion tons. And the main reason for that is the switch from coal to natural gas in the power sector,” he said, adding the United States has surpassed any other country in that achievement.
“Two thirds of that drop is again due to the shift from coal to natural gas. There are many countries, many regions of the world, that are looking to replicate that exact success.”
He added that worldwide, a record 8 billion tons of coal was burned in 2023, which will only grow with a stall on LNG exports.
Hrenko-Browning said the delay on exports will have trickle-down effects on Utah and elsewhere in the country, creating uncertainty in the industry and chasing investors away.
“I do think that we’re going to see some of the domino effects of a prolonged export pause or challenges and export ability, even here in Utah,” she said.
Jennings said the LNG export approval delays are not entirely a Biden problem, but stretch back years due to the federal regulatory process. His organization this year has engaged in more than 75 regulatory efforts in the last 12 months alone.
He said the pause certainly won’t end before the election and may last well into the first quarter of 2025.
Hrenko-Browning agreed.
“It’s an election year, so it is silly season,” she said.
