The Biden administration’s impending report on the environmental impacts of increased liquefied natural gas (LNG) exports has the potential to complicate President-elect Trump’s plans to swiftly authorize new LNG export licenses. This report, expected by mid-December, is mandated by the Natural Gas Act, requiring the Department of Energy (DOE) to assess the public interest implications of such exports before issuing permits. While some downplay the report’s significance, arguing that Trump could simply overturn any Biden-era restrictions, others believe it could empower environmental groups to challenge the new administration’s actions.
The crux of the matter lies in the potential for legal challenges. If the Biden administration’s report concludes that increased LNG exports are not in the public interest, the Trump administration would be compelled to either commission a new study with different findings or reinterpret the existing study to justify approving new permits. This process, depending on the report’s content, could take weeks, months, or even multiple quarters, effectively delaying Trump’s energy agenda. Industry stakeholders, while anticipating support from the Trump administration, acknowledge the need for robust legal justification for any policy changes. The report’s findings could create legal vulnerabilities, forcing the incoming administration to meticulously address the concerns raised.
This situation creates a complex dynamic between the outgoing and incoming administrations, with the Biden administration’s report potentially serving as a roadblock to Trump’s plans. Trump has clearly signaled his intent to swiftly reverse the Biden administration’s “temporary pause” on new LNG export permits, aiming to boost domestic energy production and dismantle what he sees as burdensome climate regulations. This pause, initiated in January, included a DOE review of the existing environmental impact analysis used to fulfill the requirements of the Natural Gas Act. The Act’s stipulation, excluding countries with free trade agreements, impacts a significant portion of the LNG market, as 80% of the market consists of countries without such agreements with the U.S.
The political implications are significant. Trump’s campaign rhetoric emphasized reversing Biden’s energy policies and lowering energy costs, promises he intends to fulfill upon taking office. He has even proposed expedited approvals and permits for billion-dollar investments in the U.S., including environmental approvals, further underscoring his commitment to rapid deregulation. His transition team has echoed this sentiment, criticizing the Biden administration’s “war on American energy” and its perceived contribution to inflation, highlighting Trump’s mandate to prioritize energy dominance and affordability.
However, the Biden administration’s report could significantly complicate this agenda. The report, and the subsequent public comment period, could provide ammunition for legal challenges, potentially slowing down the approval process for new LNG export licenses. Even those who support increased LNG exports acknowledge the potential for delays, recognizing that the Trump administration will need to respond to the report’s findings and address any legal challenges that may arise. The timing of the comment period, likely occurring during the Trump administration, adds another layer of complexity, raising questions about the weight given to comments submitted during a transition period.
Ultimately, the Biden administration’s report represents a final effort to influence energy policy before the transition of power. While its impact remains uncertain, it could force the Trump administration to navigate a complex legal landscape, potentially delaying the swift action promised on LNG exports. This highlights the tension between the two administrations’ differing energy priorities and sets the stage for a potential legal battle over the future of U.S. LNG exports. The report’s findings and the ensuing political and legal maneuvering will significantly shape the trajectory of U.S. energy policy in the coming months and years.
