- Biden Administration’s extended review process for LNG export permits causes setbacks for U.S. projects.
- Concerns arise over the ability to supply European Buyers as vital permits are lacking.
The U.S. Department of Energy (DOE), under President Biden, has significantly extended the review process for Liquefied Natural Gas (LNG) export permits, causing substantial setbacks for LNG projects. Delays may impede U.S. LNG producers in meeting commitments to European buyers due to permit shortages. The prolonged permit issuance process, especially for major non-FTA countries, concerns the industry.
Under the Obama administration, the average time for granting an LNG export license to non-FTA countries was 155 days. The average time for an LNG export license reduced to 49 days during the Trump administration, reflecting a pro-export stance. However, the current Biden administration has seen a significant increase in processing time, now averaging 330 days for non-FTA approvals.
Non-FTA approvals hold paramount importance for U.S. LNG facilities, as they enable these facilities to reach global markets. Non-FTA countries are significant consumers of American LNG, making the timely issuance of export permits crucial for industry stakeholders. Critics argue that political considerations drive the DOE’s deliberate slowdown in the permit approval process. U.S. industries express concerns over the potential consequence of increased domestic gas prices resulting from expanded LNG exports.
Environmental groups express concerns about the fossil fuel industry’s ongoing growth and its environmental impact. According to an LNG analyst at the energy consultancy Rapidan Group, “Without these permits, projects cannot move forward.” The DOE’s hesitance on LNG permits, driven by political factors, creates uncertainty and hinders an industry working to meet global energy demands.