Gas export projects likely to remain in limbo despite court ruling

New gas export projects will likely remain in limbo for many months despite a judge halting the Biden administration's pause on approving such projects on Monday.

The administration still has discretion in its review of new projects, and experts don't expect it to approve any ahead of the November election, in which President Biden looks to face a closely fought rematch with former President Trump.

Approving new gas export facilities would likely alienate progressive voters who already have a tenuous relationship with Biden and have raised concerns about gas's environmental impact.

“I don’t think it’ll have much impact at all,” Ira Joseph, senior research associate at Columbia University’s Center on Global Energy Policy, said of the order lifting the administration’s pause. 

Joseph added that the Energy Department “has the ability to review the license for non-[free trade agreement] approval for as long or as short as they want.”

The Biden administration said in January that it would temporarily stop authorizing gas export terminals to ship fuel to countries that don’t have free trade agreements with the U.S., otherwise known as non-FTA countries. 

Opponents of the move sued, and Judge James Cain, a Trump appointee, earlier this week blocked the administration’s pause “in its entirety, effective immediately” while the litigation against it plays out.

However, the Energy Department still has the right to review the projects waiting in its queue for non-FTA approval. 

In response to the ruling, the department said that it “continues to review the court’s order and evaluate next steps.” 

Meanwhile, the White House said that it is “committed to informing our decisions with the best available economic and environmental analysis.” Updating such analysis is the reason that it gave for the pause to begin with. 

Having the pause in place also made it unlikely that the Biden administration would have to issue any politically difficult decisions in an election year.

The move won praise from climate activists, who had pushed the administration not to approve new gas export projects. 

Climate advocates' opposition to the gas expansion is among the reasons why analysts say the administration is unlikely to approve any new projects in the months ahead.

"There's several constituency reasons for why the Biden administration wouldn't want to move ... any faster. One is, of course, environmentalists who think that exporting more [U.S. gas] is going to lock in fossil fuels,” said Derrick Flakoll, U.S. policy analyst at research firm BloombergNEF. 

“Two is also the domestic audience considerations — the more [natural gas] you export, the higher natural gas prices go in the U.S., and in an election defined by inflation, that's not a button you want to push either,” Flakoll added. 

Progressive and environmental groups are similarly saying they don’t expect the Biden administration to approve new projects despite the ruling — and are putting pressure on the administration to not push any more gas export projects through. 

Lukas Ross, deputy director of the climate and energy justice program at progressive environmental group Friends of the Earth, said he expects that the Energy Department “is going to continue to evaluate its deeply flawed approach to approving projects, and there will be no movement” until after the review is finished. 

Mahyar Sorour, director of beyond fossil fuels policy at the Sierra Club, said in a written statement that the department “should stay the course and review each application and make the proper public interest determination, and ultimately, deny any pending applications."

Even some of the pause’s critics were pessimistic about the chances of new gas approvals in the months ahead. 

“They don’t really have to do anything,” said Frank Maisano, senior principal at law and advocacy firm Bracewell, whose clients include energy companies that are awaiting permits. 

“I wouldn’t expect this administration ... to move expeditiously on anything related to this because it will just further drive a wedge between a group that they need badly to show up in November,” Maisano added. 

However, if the Biden administration doesn’t approve more projects in the months ahead, it is likely to see pushback from the energy industry and Republicans, who argue that gas exports are important for bolstering the industry and can provide fuel to U.S. allies, promoting security. It’s not clear whether such pushback could include further litigation. 

“Our message to the administration will continue to be that the need for additional U.S. energy supply … is clear,” said Dustin Meyer, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, which lobbies on behalf of the industry. 

“We would ask that the [Energy Department] continue to process these applications and approve them as expeditiously as possible, and if they don't do so, absolutely, there's going to be a lot of questions from the industry and many others as to why they aren't doing that,” he added.