Biden Grants First New LNG Approval Since Freezing Permits

(Bloomberg) -- The Biden administration granted the first liquefied natural gas export license since a federal court overturned a temporary moratorium on issuing permits to ship the fuel.  

The US Energy Department granted a five-year license Tuesday to Wes Edens’ company New Fortress Energy Inc., which is developing the small-scale LNG export plant known as Fast LNG offshore near Altamira, Mexico. The approval is key for US LNG export developers to sell LNG globally to countries in Europe, Japan and China. 

The Energy Department, under the White House’s direction, announced in January it was halting new licenses to export LNG to key 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. A federal judge in Louisiana lifted the temporary moratorium in July after 16 states filed a lawsuit arguing the pause violated federal law. The Energy Department is appealing the ruling.

The Energy Department said the license does not allow the company to increase its overall LNG exports. It does, however, permit it to ramp up exports to countries that don’t have free-trade agreement with US, including allies in Europe, by about 3%, the agency said in a statement.

The Energy Department “continues to update its analyses of LNG exports to ensure the best information, guided by the latest science, is considered for future reviews of LNG export applications,” the agency said.

Climate activists have argued that 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. 

“It’s ridiculous that the Department of Energy would issue this license despite the administration’s ongoing, incomplete public interest review of such exports,” said Mitch Jones, a managing director at Food & Water Watch, a progressive environmental group. “The department is under no obligation to approve these ill-advised proposals, now or ever.”

New Fortress Energy had requested a license that would last through 2050. Typically US LNG exporters would receive federal licenses for up to 20 years or longer to sell LNG from their projects, a time frame in line with the long-term contracts sold from the facilities.

The Fast LNG project has been beset with delays, including a mechanical issue in April, originally targeting 2022 as its start date. 

New Fortress Energy previously had a license to sell LNG to free-trade agreement nations, which include Mexico and Jamaica, where the company has import operations. 

“This important authorization cements NFE’s position as a leading global vertically integrated gas to power company and enhances the marketability of our FLNG 1 asset,” said Wes Edens, chairman and CEO of New Fortress Energy, in a statement Tuesday. 

(Adds statement from Energy Department in fourth and fifth paragraphs.)

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