Delaying export permits for liquefied natural gas , or LNG, from already constructed and permitted LNG facilities on the U.S. Gulf Coast, President Joe Biden is demonstrating that he is more interested in appeasing environmental zealots than he is in the national security and the economic well-being of the country.
Basic economic theory says that free trade will increase economic growth and prosperity for individual countries and for the world population. Free trade maximizes national and international wealth.
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That bears note because the U.S. is a low-cost producer of natural gas. It is a low-cost exporter of LNG. Because of Russia’s invasion of Ukraine, our European allies are eliminating their purchases of Russian natural gas. Europe wants to replace Russian gas with U.S. LNG. But under the Biden administration, the approvals of final export licenses have been seriously delayed. The administration has increased the time it takes to approve an export license for LNG from seven weeks, the average during President Donald Trump’s administration, to 11 months and longer.
The delay in final export approval means Europe could freeze in future winters. European industry could grind to a halt. That would have serious consequences for global trade and growth. The domestic LNG industry plans to expand export capacity by 50% from current levels. The U.S. domestic LNG industry is already a major employer and exporter. The U.S. is the global leader in LNG exports. The biggest European buyers of U.S. LNG are the Netherlands and the United Kingdom. Germany is also an important customer.
All three countries are critical allies in relation to Russia. Moreover, the Netherlands is an important ally in denying China access to cutting-edge semiconductor technology. The Netherlands has agreed to limit exports to China of ASML’s most sophisticated semiconductor lithography technology. ASML is headquartered in the Netherlands. ASML has a global 100% monopoly position in 3 nm semiconductor lithography technology.
By delaying export licenses for LNG, the Biden administration risks unraveling its strategy to deny China access to the world’s most advanced semiconductor technology. The Netherlands could say, “No LNG, no cooperation on lithography technology.” Commonwealth LNG is ready to ship LNG to Europe tomorrow. But it can’t ship without a final export license. It has been waiting for almost 365 days.
Environmental zealots oppose granting Commonwealth LNG an export license. Biden’s liberal base is quite happy to destroy the LNG industry in the Gulf Coast. The Biden administration is a victim of regulatory capture. U.S. industries that consume natural gas oppose more exports of LNG. Denying export licenses keeps domestic natural gas prices low. But export controls reduce new production and ultimately lead to higher energy prices for both industry and households.
Biden’s LNG export policies are another example of his duplicitous incompetence. He does not truly support Ukraine, the Western alliance on denying China advanced semiconductor technology, and free market capitalism. Biden is about Biden, not the nation.
James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note on finance and the economy, politics, sociology, and criminal justice.
Source: Washingtonexaminer.com
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