A rare, sweeping win against fossil fuels

Straight to good news: the Biden administration just halted the country’s largest proposed fossil fuel development project, a proposed liquified natural gas (LNG) export terminal nicknamed "CP2."

The LNG industry is ticked, but pro-planet organizations, frontline communities, and climate activists are celebrating. This executive decision is a direct result of people like you stepping out of their comfort zones to speak up—to a world-changing effect. But what the heck is LNG and why is this all such a big deal?

Let’s break it down:

What’s LNG and how did it become prominent in the U.S.?

LNG terminals are massive. Typically located on the coast, they often include a liquefaction plant, storage tanks, pipelines, specialized marine infrastructure to dock and unload/load LNG, and special tanker ships.

Since the inauguration of the first LNG export facility on the Gulf Coast in 2016, 7 more facilities have been constructed, 5 are under construction, and an astonishing 17 additional facilities are awaiting approval from the Department of Energy.

During the domestic fracking boom of the 2000s, the U.S. ramped up production of fossil gas and began exporting it internationally. The process involves the transformation of fossil gas into liquified natural gas at specialized export facilities which are designed to operate for several decades. While fossil gas does burn less carbon dioxide than coal and fuel oil, LNG exports actually emit more greenhouse gases than producing the same amount of energy with coal. Coal! (This shocking fact can be attributed to the largely uncontrolled methane leakage along the LNG supply chain. Methane, while shorter-lived than carbon dioxide, has 80x the global warming potential of CO2 when first released into the atmosphere.)

In addition to enormous emissions footprints, LNG export facilities are toxic to local communities and, as the Biden administration scrambles to meet its emissions reduction pledges under the Paris Agreement, long-term commitment to fossil fuel development has become increasingly controversial. So you can see why a decade of ramping up LNG exports was… probably not the best idea. (Read more from Canary Media).

A moment for myth-busters:

Proponents of domestic LNG development have pushed two popular narratives in recent months, neither of which stands up to scrutiny.

1) U.S. allies: They often argue that because the war in Ukraine has caused an energy supply crisis in Europe, our allies need us to develop new LNG terminals to meet peak demand. However, existing U.S. LNG exports are adequately meeting their needs, plus evidence shows that European natural gas demand is dropping precipitously. We love sticking it to Putin, but it looks like we don’t need 17 new LNG terminals to do so.

2) Domestic gas prices: The other (usually glossed over and intentionally vague) argument is that increased fossil gas supply from the U.S. means domestic gas prices will fall. Unfortunately, that argument is a misappropriation of supply and demand. Research shows that LNG exports actually push domestic gas prices upward because they tie U.S. gas markets to global price fluctuations.

Tell us about the big win!

The role of the U.S. Department of Energy is pivotal in deciding the fate of LNG development in the U.S.

The main characters:

• U.S. Department of Energy (DOE): a government agency responsible for researching and developing energy technologies, advancing energy efficiency, ensuring national security and a sustainable energy future, and promoting environmental responsibility. The DOE issues export licenses to LNG facilities once they’re permitted.

• Federal Energy Regulatory Commission (FERC): an independent agency within the DOE that is responsible for permitting LNG projects.

• Natural Gas Act: legislation that gives the federal government the authority to regulate the transportation and sale of natural gas and requires all LNG terminals to be approved unless they are determined not to be “consistent with the public interest.”

The crazy fact: Since 2005, FERC has narrowly interpreted the Natural Gas Act and has not factored “climate impact” into its assessment of the “public interest” when permitting LNG development.

The big news: In a significant policy shift on January 24, 2024, the Biden administration paused the evaluation of the 17 proposed LNG terminal projects in order to develop new criteria for the "public interest" determination, which will, for the first time, take climate change into account.

This development is monumental. It signals better alignment of U.S. actions with the commitments made at COP28 to transition away from fossil fuels and those required by the Paris Agreement.

How did it happen?

It's important to recognize that this policy shift is not just a top-down decision. It's a victory born out of relentless advocacy and grassroots activism (and hey, it doesn’t hurt to win over some climate voters in a decisive election year for President Biden, who is, so far, the decisive climate champion among the 2024 presidential candidates). In November of last year, over 60 members of Congress urged the Biden administration to pause permitting of proposed LNG terminals until climate impacts could be taken into account. It’s advocates like you who motivate elected officials to use their platform in this way. Even when we don’t have a direct line to the president or FERC, we can push our senators and representatives to stand up on our behalf.

What’s next for new LNG terminals?

Most people expect the Biden administration to ensure the climate impact evaluation takes the remainder of his first term, through January 2025. This could render the largest proposed LNG project, the so-called “CP2” terminal, no longer financially viable.

That said, no executive branch decision is permanent on its own. The new LNG climate impact evaluation policy could be reformulated if the presidency changes hands. But there are some potential ways it could be set in stone:

1. FERC could finalize a rule that interprets “public interest” to include limiting greenhouse gas emissions. Will they do this? It’s possible, since Democratic FERC commissioners currently have a two-thirds majority. But the timeline is tight, and it’s very difficult for the public to influence FERC as an independent executive agency. FERC commissioners are confirmed by the Senate, and there are currently two vacant seats. Their confirmations could be an opportunity for climate advocacy. Courts can also compel FERC to take action (and the Sierra Club has sued over LNG permitting).

2. Congress can amend the Natural Gas Act to specify a definition of “public interest.” It could also codify the decision by banning LNG exports outright. Neither of those things will happen in 2024. If either policy gained traction in the future, constituents could contact their members of Congress to voice support.

For now, advocates should celebrate this tremendous win 🎉

Continue to focus on encouraging elected officials to center climate in their policymaking. Climate Changemakers always has a timely, influential Action Plan to do exactly this. Plus, 2024 will be an important and competitive election year. Help turn out the vote and know which climate champions are on the ballot!