Judge Blocks Biden’s Bid to Halt LNG Export Licenses Over Climate

(Bloomberg) -- A federal judge halted Joe Biden’s temporary moratorium on new licenses for exports of US liquefied natural gas, though the decision is unlikely to immediately jump start approvals. 

US District Judge James D. Cain Jr. in Louisiana issued a preliminary injunction Monday in a lawsuit filed by 16 states, which argued Biden violated federal law by halting licenses in January to assess impact of shipments on climate change. Patrick Morrisey, the attorney general of West Virginia, called the decision “a big win for the country’s energy industry and the millions of jobs it supports.”

Climate activists have argued LNG exports sustain the world’s reliance on fossil fuels and further global warming. But US gas producers and advocates said the halt in licensing threatens to harm allies dependent on American energy supplies as well as billions of dollars in LNG export projects.

The Department of Energy disagrees with the ruling but “continues to review the court’s order and evaluate next steps,” according to a statement from the agency.

In his opinion, Cain said the government’s decision to halt approvals appears to be “completely without reason or logic and is perhaps the epiphany of ideocracy.” States can pursue their legal challenge to the moratorium, he added.

Some $61 billion in pending infrastructure in Louisiana is at risk from the pause, Liz Murrill, the state’s attorney general, said Monday. She called the decision “a major victory for American energy.”

Approvals Halted

Under Biden’s direction, the Department of Energy stopped approving new licenses to export LNG to Asian nations and other countries that aren’t free trade partners with the US, while the agency scrutinized how the shipments affect climate change, the economy and national security.

The pause affected new licenses only. The US is the world’s largest exporter of LNG and has more room to grow under existing licenses. 

Although the court order immediately enjoins the pause, the short-term practical effects are likely to be minimal. Under federal law, the Department of Energy vets whether such LNG exports are in the public interest — and it can continue scrutinizing proposals for new export licenses on a case-by-case basis. 

The Department of Energy “has the authority — and obligation — to adequately review the true impacts of LNG exports, and we believe they will come to the same conclusion we have,” said Louisa Eberle, a staff attorney with the Sierra Club. That is, “expanded LNG exports are not in the public interest and the pending applications should be denied.”

The case is Louisiana v. Biden, 24-cv-406, US District Court, Western District of Louisiana (Lake Charles).

(Updates with Department of Energy and environmental group response from fourth paragraph.)

©2024 Bloomberg L.P.