Does Biden’s LNG Pause Risk Rockies Natural Gas Revolution?

The Biden Administration’s decision to delay new U.S. liquefied natural gas (LNG) export permit approvals is risking a low-carbon revolution happening in the Rockies, which is positioning us to lower global emissions reductions, sustain durable rural economic activity and support America’s geopolitical strength for future decades.  

The delay delighted activists whose sole mission is to oppose functioning energy systems and efforts to improve their emissions footprint, but it comes at the cost of American global power, competitiveness, environmental leadership and jobs. 

READ: Unlocking America’s Energy Security Begins in the West — Here’s Why

As Colorado Members of Congress Yadira Caraveo and Doug Lamborn wrote to President Biden, this decision “will have a chilling effect on the gas sector and cause real harm to Colorado consumers” and the more than 300,000 working in the natural gas and oil business, which contributes $48.7 billion to the state’s GDP. 

The Rockies’ gas evolution

It also shows disregard to the leadership and progress Colorado and its Rockies neighbors have made in reducing natural gas’ environmental footprint, with our state having the strongest methane restrictions in the nation, if not the world. 

This Rockies revolution, happening here and in our neighboring states and sovereign tribal nations, is a testament to the American knack for refining, improving and innovating. 

In Utah, Colorado, New Mexico, and Wyoming, our member companies are working hand-in-glove with their states — and some with the Department of Energy — to perfect their production to certify Rockies-produced LNG as low-methane, a competitive advantage in the global market. The same goes for WSTN’s tribal nations, who must contend with an additional layer of bureaucracy from the Bureau of Indian Affairs. 

READ: Capitalizing on Colorado’s Homegrown Energy

The silver lining

This decision’s silver lining is that it is a turning point in the long-running battle for the truth about LNG exports, because it provoked bipartisan condemnation for its naked electoral aims.

The LNG debate is dominated by an either-or, ideology-over-facts mentality, led by opponents who understand mass communications well. What they do not understand well, nor care to understand, are supply chain fundamentals, consumer pricing, energy economics and the obligation to stand true to our word and support our allies and partners with low-carbon energy. 

Their claim that LNG exports will raise domestic gas prices is false, on its face. Domestic prices last year fell by a third from the 2021 pre-war average, despite a brief surge in early 2022. The current benchmark is below the Energy Information Administration’s 10-year average Henry Hub price. WSTN’s inflation-adjusted analysis of a DOE forecast in a high-demand, low-supply scenario shows prices remaining stable and within the 10-year average range out to 2050. Chalk this up to producers being able to move swiftly to meet demand, which keeps domestic prices low. 

A battle for the truth

The argument that LNG locks in long-term emissions is equally false. A WSTN-commissioned study found that exporting Rockies LNG to China, India, South Korea, Japan and Taiwan to replace higher-emitting fuels could produce emissions reductions of 42%-55%. 

In fact, the current approval delay risks four pending approvals to India, which could cut its emissions footprint by 49.8% if it uses Rockies LNG to replace its current generation fuels.

This is how an American president’s decision ricochets across the globe — a good word unleashes capital; a bad one closes the taps. Our ability to plan investment is critical to meeting growing LNG demand, as the world’s biggest exporter of it. Buyers desperate to lock in supplies will go to other nations, not all of whom are friendly, if we can’t stump up. 

LNG: Geopolitical firm power

LNG must be viewed as a “firm power” of geopolitics, squarely between the persuasive soft power of America’s stringent environmental standards and decarbonization efforts broadcasts, and the hard power of our economic and military might. 

The Biden Administration has heretofore recognized LNG as a decarbonization tool and effective countermeasure to the weaponization of energy, as Russia did to Europe after invading Ukraine. The Administration vocally supported the U.S. LNG industry’s modern-day Berlin Airlift of LNG to allies in response. 

No less importantly, the State Department has made LNG a major component of bilateral energy security dialogues with the UK and Japan, and backed a role for it in international accords from the Group of Seven nations and yes, even the U.N. Climate Conference last year. 

We urge the Biden Administration to rethink its decision and return LNG to the pragmatic, influential role it has in supporting allies and friends, improving the global environment and generating long-term rural and tribal economic activity at home. 

The Rockies revolution in producing the cleanest molecule of gas will still move forward, but its impact and influence will be far greater if its successes, and those of others in the U.S. on the same path, are amplified by a national policy that sees LNG for the firm power geopolitical and environmental asset it is.  

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Andrew Browning is the President of the Western States and Tribal Nations Natural Gas Initiative.