The Biden administration issued its first license for natural gas exports in months on Tuesday, but the move is likely motivated by a desire to help the Harris campaign, energy sector experts told the Daily Caller News Foundation.

The Department of Energy (DOE) issued a five-year license to New Fortress Energy to export liquefied natural gas (LNG) to non-free trade agreement (non-FTA) countries this week, the first such license it has issued to export terminal developers since announcing a freeze on non-FTA LNG export approvals in January. The DOE’s decision should not be interpreted as a sign that the Biden administration is retreating from its pause, but instead as a potential political ploy meant to help Vice President Kamala Harris present a more moderate image on energy issues as the election approaches, energy experts explained.

“While I’m glad they issued the permit, no one should be fooled by the optics here. The facility, located in Mexico, is very small relative to the larger U.S. based projects being held hostage by the Biden-Harris Administration’s LNG pause,” Tom Pyle, president of the American Energy Alliance, told the DCNF. “Like her supposed reversal on banning fracking, or her newly discovered love for gasoline powered vehicle, issuing one LNG permit for a Mexico-based facility two months before the election is not a thawing of this Administration’s hostility towards the oil and gas industry.”

“It is a political tactic to enable Kamala Harris to appear as if she is somehow moving to the middle in the run up to the election,” Pyle continued. “If the Biden-Harris Administration were serious about this, there are several U.S. based LNG facilities they could approve right now that have the potential to generate billions in economic activity and energy jobs here at home. But don’t hold your breath.”

New Fortress Energy’s Fast LNG 1 terminal is located off the east coast of Mexico, and the facility is already built and operational, according to a DOE spokesperson. The terminal can export about 1.4 million tons of LNG on an annual basis, according to New Fortress Energy; by comparison, the U.S. exported a total of 8.6 million tons of LNG in December 2023, the last full month before the White House announced its approvals pause, according to the Center for Strategic and International Studies.

While the company was “pleased” to announce its receipt of an export license, energy sector experts told the DCNF that five years is hardly a long enough window for a developer to make competitive profit off of a capital-intensive facility like Fast LNG 1.

“In infrastructure terms, five years is overnight,” Kevin Book, managing director of research at ClearView Energy Partners, told the DCNF. “So, the idea of building long-life infrastructure based on long-term contracts gets disrupted fairly dramatically by either short contract lives — which have been a problem in the history of U.S. LNG — and by short licenses.”

Mike McKenna, a GOP strategist and energy lobbyist, also said that the short licensing period is far from ideal for New Fortress Energy.

“It’s going to be very difficult for them to make money within a five-year window,” McKenna told the DCNF.

Rather than meaningfully walking back its export approvals freeze, the DOE is more likely “trying to pop the balloon for Vice President Harris in Pennsylvania, because that’s where she’s really bleeding on this issue,” McKenna added.

The administration is under a court order to lift its approvals freeze, which the federal government is appealing, but both McKenna and Book told the DCNF that there is a difference between the agency ending the pause and actually starting to issue new licenses on a consistent basis.

“You really can’t make an administration do something it doesn’t want to do,” McKenna told the DCNF. “Courts can get them to release prisoners, they can stop stuff, but they can’t really get them to do things … this is an attempt to pop a hole in the balloon that the campaign is facing right now.”

Book said that “it would be hard not to think” that the politics of the presidential race are playing some role in the DOE’s decision-making, adding that “it looks almost as though the DOE may be trying to approve a small facility so that they can have political cover for continued silence on larger facilities.”

Natural gas is hugely important to Pennsylvania’s economy, as the state produced more natural gas in 2022 than any other state in the country other than Texas, according to the U.S. Energy Information Administration, and the industry supports more than 100,000 jobs in the state, according to one estimate by FTI Consulting. Before President Joe Biden dropped out of the race, energy experts and political pundits told the DCNF that the administration’s export approvals moratorium could potentially be enough to determine the balance of the U.S. Senate in 2025.

The Harris campaign, meanwhile, has made an effort to distance the vice president from aggressive left-wing positions on environmental and energy issues that she had supported earlier in her career, such as a ban on fracking and mandating electric vehicles.

The DOE explained its decision to issue the license in a statement shared Tuesday with the DCNF. The agency did not respond immediately to Wednesday follow-up questions about whether the license indicates an imminent thaw of its approvals freeze or whether political considerations played any role in the decision.

“This action authorizes the already constructed and operational NFE Altamira floating LNG export platform located off the coast of Mexico, in the Gulf of Mexico to re-export up to 0.4 billion cubic feet per day of U.S.- sourced natural gas as LNG to non-FTA countries for a 5-year export term,” a DOE spokesperson said in the Tuesday statement. “This order does not increase the total volume of LNG that NFE Altamira can re-export, however, it does increase available exports to non-FTA countries, which include our allies in Europe, by approximately 3%. These exports will be available for the upcoming winter. Separately, DOE continues to update its analyses of LNG exports to ensure the best information, guided by the latest science, is considered for future reviews of LNG export applications.”

New Fortress Energy did not respond immediately to a request for comment.

Nick Pope
September 4, 2024

Featured Image Credit: Gage Skidmore from Surprise, AZ, United States of America

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