decisions TBD

Consideration for new LNG terminals delayed with climate risk in mind

Texas has a few LNG projects in the works, but it's unclear how the delay will affect them. Photo via Getty Images

The Biden administration is delaying consideration of new natural gas export terminals in the United States, even as gas shipments to Europe and Asia have soared since Russia’s invasion of Ukraine.

The election year decision by President Joe Biden aligns with environmentalists who fear the huge increase in exports, in the form of liquefied natural gas, or LNG, is locking in potentially catastrophic planet-warming emissions when the Democratic president has pledged to cut climate pollution in half by 2030.

“While MAGA Republicans willfully deny the urgency of the climate crisis, condemning the American people to a dangerous future, my administration will not be complacent,'' Biden said in a statement Friday. “We will not cede to special interests. We will heed the calls of young people and frontline communities who are using their voices to demand action from those with the power to act.''

Texas has a few LNG projects in the works, but it's unclear how the delay will affect them.

The current economic and environmental analyses the Energy Department uses to evaluate LNG projects don't adequately account for potential cost hikes for American consumers and manufacturers or the impact of greenhouse gas emissions, the White House said.

Industry groups condemned the pause as a “win for Russia," while environmentalists cheered an action they have long been seeking as a way to counter Biden’s approval of the huge Willow oil project in Alaska last year.

“This decision is brave, because Donald Trump (the man who pulled us out of the Paris climate accords on the grounds that climate change is a hoax) will attack it mercilessly,'' environmental activist Bill McKibben wrote in an online post.

“But it’s also very, very savvy: Biden wants young people, who care about climate above all, in his corner. They were angry about his dumb approval of the Willow oil project,'' McKibben added.

A proposed LNG export terminal in Louisiana would produce about 20 times the greenhouse gas emissions of Willow, McKibben noted.

“And of course everyone understands that if Biden is not reelected this win means nothing. It will disappear on Day One when (Trump) begins his relentless campaign to ‘drill drill drill,'" he said.

Energy Secretary Jennifer Granholm said the pause will not affect already authorized export projects and noted that U.S. gas exports reached record highs last year. The pause will not immediately affect U.S. supplies to Europe or Asia, Granholm said, since seven LNG terminals are currently in operation, with several more expected to come online in the next few years.

"We remain committed to ensuring our partners' medium-term energy needs are met,'' she told reporters at a White House briefing late Thursday. If necessary, the Energy Department can allow exceptions for national security needs, Granholm said.

She and other officials declined to say how long the permitting pause will last, but said a study of how proposed LNG projects will affect the environment, the economy and national security will take "some months.'' A public comment period after that will likely delay any decisions on pending LNG projects until after the 2024 presidential election.

U.S. exports of liquefied natural gas began less than a decade ago, but have grown rapidly in recent years to the point that the U.S. has become the world’s largest gas exporter. Exports rose sharply after Russia's February 2022 invasion of Ukraine, and Biden and Granholm have celebrated the delivery of U.S. gas to Europe and Asia as a key geopolitical weapon against Russian President Vladimir Putin.

The American Petroleum Institute, the largest lobbying group for the oil and gas industry, turned those comments against the Democratic administration as it condemned Biden's action.

“This is a win for Russia and a loss for American allies, U.S. jobs and global climate progress," said Mike Sommers, API's president and CEO.

"There is no review needed to understand the clear benefits of U.S. LNG (exports) for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels'' and away from coal, Sommers said in a statement.

Biden's action "is nothing more than a broken promise to U.S. allies, and it’s time for the administration to stop playing politics with global energy security,” he said.

Granholm, who has made it a point to work with oil and gas executives even as Biden has exchanged sometimes pointed barbs with them, said “a lot has happened” since LNG exports began about eight years ago.

“We need to have an even greater understanding of the (global energy) market need, the long-term supply and demand of energy resources and the environmental factors,'' she said. “So by updating the analysis process now, we will be better informed to avoid export authorizations that diminish our domestic energy availability, that weaken our security or that undermine our economy. ‘’

Granholm emphasized the delay “is not a retroactive review of already authorized exports,'' nor is it intended to punish the oil and gas industry.

“We are committed to strengthening energy security here in the U.S. and with our allies, and we’re committed to protecting Americans against climate change as we lead the world into a clean energy future,'' she said.

Jeremy Symons, an environmental consultant and former climate policy adviser at the Environmental Protection Agency, called Biden's decision a “game-changer” in the fight against climate change.

“The president is drawing a line in the sand to put the nation's interests first and listen to climate science,'' Symons said in an interview. ”The days of massive fossil fuel projects like the CP2 project escaping scrutiny from the federal government are over. We now have a president who cares about climate change.''

Symons and other activists have targeted the $10 billion Calcasieu Pass 2 project, or CP2, along Louisiana's Gulf Coast, noting it would be the nation's largest export terminal if built. The project in Cameron Parish would export up to 20 million tons (18.1 million metric tons) of chilled natural gas per year, creating more greenhouse gas emissions than even the Willow project, which environmentalists have decried as a "carbon bomb.''

Symons called the gas project "bad for our nation, bad for our health and bad for our economy.''

Shaylyn Hynes, spokeswoman for the project’s owner, Virginia-based Venture Global, said the Biden administration "continues to create uncertainty about whether our allies can rely on U.S. LNG for their energy security.''

A prolonged pause on LNG exports "would shock the global energy market ... and send a devastating signal to our allies that they can no longer rely on the United States,'' said Hynes, who served as an Energy Department spokeswoman in the Trump administration.

"The true irony is this policy would hurt the climate and lead to increased (greenhouse gas) emissions, as it would force the world to pivot to coal'' instead of natural gas, Hynes said.

Climate activists dispute that, calling LNG a leading contributor to climate change due to methane leaks and an energy-intensive process to liquefy gas.

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A View From HETI

Ace Green Recycling has secured a deal that will supply 100 percent of its phase one recycling capacity at its forthcoming Texas flagship facility. Photo courtesy Ace Green Recycling.

Houston- and Singapore-headquartered Ace Green Recycling, a provider of sustainable battery recycling technology solutions, has secured a 15-year battery material supply agreement with Miami-based OM Commodities.

The global commodities trading firm will supply Ace with at least 30,000 metric tons of lead scrap annually, which the company expects to recycle at its planned flagship facility in Texas. Production is expected to commence in 2026.

"We believe that Ace's future Texas facility is poised to play a key role in addressing many of the current challenges in the lead industry in the U.S., while helping the country meet the growing domestic demand for valuable battery materials," Nishchay Chadha, CEO and co-founder of Ace, said in a news release. "This agreement with OM Commodities will provide us with enough supply to support our Texas facility during all of its current planned phases, enabling us to achieve optimal efficiencies as we deploy our solutions in the U.S. market. With OM Commodities being a U.S.-based leader in metals doing business across the Americas and Asia with a specialty in lead batteries, we look forward to leveraging their expertise in the space as we advance our scale-up efforts."

The feedstock will be sufficient to cover 100 percent of Ace's phase one recycling capacity at the Texas facility, according to the statement. The companies are also discussing future lithium battery recycling collaborations.

"Ace is a true pioneer when it comes to providing an environmentally friendly and economically superior solution to recycle valuable material from lead scrap," Yiannis Dumas, president of OM Commodities, added in the news release. "We look forward to supporting Ace with lead feedstock as they scale up their operations in Texas and helping create a more circular and sustainable battery materials supply chain in the U.S."

Additionally, ACE shared that it is expected to close a merger with Athena Technology Acquisition Corp. II (NYSE: ATEK) in the second half of 2025, after which Ace will become a publicly traded company on the Nasdaq Stock Market under the ticker symbol "AGXI."

"As we continue to scale our lead and lithium battery recycling technologies to help support the markets for both internal combustion engines and electric vehicles, we expect that our upcoming listing will be a key accelerator of growth for Ace,” Chada said.

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