Washington’s interruption on new licenses for liquefied natural gas export projects has triggered backlash from industry leaders, who argue that it could exacerbate emissions and compromise global energy stability. EQT Corp. (NYSE:EQT) CEO, Toby Rice, branded the policy a “political stunt,” forecasting a surge in emissions and detrimental ramifications for energy security.
Rice underscored, “This decision is detrimental not only from an environmental standpoint but also jeopardizes energy security. Restricting LNG will result in increased emissions as it hinders the substitution of coal.”
Rice further warned that the setback in LNG export projects might impede the transition from foreign coal, impacting the race to achieve net-zero emissions. His concerns are echoed by Exxon Mobil (XOM) CFO, Kathy Mikells, who denounced the pause as a “mistake” that could impede global efforts to achieve net-zero emissions.
The skepticism isn’t just confined to industry leaders. A cohort of Democrat U.S. House lawmakers, predominantly from gas-producing states like Texas, Alaska, and California, have implored President Biden to reassess the decision. The request represents a broader challenge to the administration’s energy policies, with the potential for bipartisan support in favor of a disapproval resolution.
Nevertheless, experts opine that a natural lull in the construction of LNG export facilities was anticipated even prior to the administration’s pause. With several U.S. projects yet to commence construction due to insufficient contracts, speculation suggests that demand for LNG in the medium term isn’t as robust as initially anticipated.
While the hiatus may impart an 18- to 24-month delay, the global LNG market is deemed capable of absorbing such a disruption given the multitude of ongoing construction projects in the U.S.
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