Last Friday, the Biden administration announced they would be ‘pausing’ all liquified natural gas (LNG) exports for the foreseeable future – a detrimental decision that will impact the Texas economy, specifically the Gulf Coast region. Plans for important expansions at three key LNG facilities in Texas – Port Arthur LNG, Golden Pass, and Corpus Christi Midscale – have hit a roadblock due to the cessation of new exports. These expansions, intended to propel Texas further into the forefront of the LNG industry, are not just isolated projects, they are crucial pillars of our state's economic growth, job creation and energy security.
However, the implications of this short-sighted decision extend far beyond the Lone Star State. On the global stage, this action provides a strategic advantage to adversaries like China, Russia and Iran, who can now seize an opportunity to become leading global energy suppliers. This will undoubtedly weaken not only our efforts to become energy independent, but also our national security posture at a time of unprecedented instability.
Our legislative leaders at the state and federal levels immediately sounded the alarm, pointing out how the Biden administration’s ‘pause’ on LNG exports undermines the critical importance of our nation's oil and gas sectors and the communities in the Lone Star State that support the industry.
Texas House Speaker Dade Phelan illustrated the direct hit this move will have on Southeast Texas, noting that President Biden’s “misguided attempt to appease radical climate change activists will directly impact the Golden Pass and Port Arthur LNG terminals currently under construction, disrupting the creation of hundreds of good jobs and the significant investment to our community these projects bring.”
U.S. Senator John Cornyn (R-TX) echoed these concerns, emphasizing the evident lack of consideration for the disastrous foreign policy implications of the decision to pause LNG exports: "As multiple wars rage and global threats continue to emerge, this bureaucratic decision abandons our friends and allies, jeopardizes our national security, and threatens our energy industry."
The irony is that, despite allegedly making this decision to spur “ambitious climate action,” the substitutes for LNG have demonstrably higher carbon emissions. In fact, when Biden’s Department of Energy (DOE) approved Cheniere Energy’s Corpus Christi liquefaction facility in March 2022, it noted that “U.S. LNG exports are likely to reduce global GHG (greenhouse gas) emissions on per unit of energy consumed basis for power productions.”
American LNG production has also been instrumental in reducing global emissions by encouraging other nations to transition towards cleaner fuels. That’s why, ultimately, the decision to halt LNG projects is counterproductive to the environmental goals our federal government claims to be advancing, making this strategy a double-edged sword that not only negatively impacts the economy but also harms the environment.
The repercussions extend beyond economic and environmental considerations. This decision complicates investment decisions for job creators, injecting uncertainty into the industry and hindering the growth of energy production that Texas has fostered through a successful "all-of-the-above" energy approach. The state's role as an energy powerhouse is at stake, and this interruption in the momentum could have lasting effects on the industry's trajectory.
Just this week, the Texas Oil & Gas Association (TXOGA) released its annual economic impact report, demonstrating that the Texas oil and natural gas industry contributes $751 billion to our state’s economy – more than a third of Texas’ total private sector output. Furthermore, the industry paid more than $26 billion in state and local taxes and royalties, supporting the critical assets that make Texas a global economic powerhouse – including our public schools, universities, roads, and other essential infrastructure.
Instead of focusing on tangible results and executing steps that fortify America's national security, sustain our energy industry dominance and boost both the national and state-level economy, the Biden administration’s decision appears to prioritize short-term political gains. It underscores the need to restore a smart and forward-thinking approach that prioritizes the economic, energy and security interests of Texas and our nation.