One US judge states that LNG project pause should be pushed aside
Ruling may have limited impact but has gained significant attention
Focus shifting to later in the year as election countdown continues
HOUSTON (ICIS)–A US federal judge attempted to disrupt the pause on federal US LNG export licenses this week, but his decision may not accelerate project permitting or investment decisions.
The Department of Energy should begin approving licenses for LNG plants to export to countries outside the US Free Trade Agreement, Judge James Cain of the Western District of Louisiana decided on 1 July.
Cain’s decision was the result of a lawsuit filed in March by 16 Republican-controlled US states, including Texas and Louisiana, whose attorneys general argued that the LNG permitting pause would impact their economies.
President Joe Biden’s administration placed what it calls a pause on approving the key LNG permits, which are issued by the Department of Energy, in January, saying the department required time to update its analysis of whether additional LNG exports fall within the public interest.
The decision borrowed language from Biden’s opponents, who call the situation an export ban.
In a memorandum, Cain agreed with the plaintiffs’ argument that the DOE did not provide an adequate reason to halt new approvals while updating the analysis.
The 8.4 mtpa Commonwealth LNG in Louisiana; Venture Global’s CP2 LNG, also in Louisiana; and the second phase of Sempra Infrastructure’s Port Arthur LNG in Texas, adding 13.5mtpa in capacity, are considered the most advanced export projects requiring DOE approval.
While some of these companies applauded the apparent regulatory victory, the direct impact of Cain’s decision is uncertain, as the DOE falls directly under Biden’s purview.
In the days following the 1 July decision – which was given the week of a US federal holiday – the DOE did not specify whether or how it would re-start non-FTA license approvals.
If the DOE holds true to the remarks of Secretary Jennifer Granholm in March, the LNG permitting pause could already be near the halfway point: Granholm said then that she expects the review process to wrap up entirely by March 2025.
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