The Biden administration is fast-tracking a crucial study that could significantly slow down President-Elect Donald Trump’s plans to approve new liquefied natural gas (LNG) export terminals. As Trump prepares to return to the White House, the study examines the climate, economic, and national security impacts of ramping up US LNG exports. This process, which has been underway since January, threatens to complicate the incoming administration’s push for rapid approval of energy projects critical to his fossil fuel agenda.
This is more than just a study; it could determine whether Trump’s LNG expansion initiatives move forward quickly, or face legal and regulatory delays. For developers, this study represents a new layer of uncertainty that could disrupt multibillion-dollar LNG projects poised to solidify the US as a global energy powerhouse.
The Key Question: Will the LNG Study Slow Down Trump’s Agenda?
Trump has made it clear that one of his first actions on Day 1 will be to end Biden’s LNG export moratorium. The current study, commissioned by the Biden administration, could present a legal obstacle to that goal. Should the findings indicate that expanding LNG exports could have harmful consequences—whether environmental, economic, or national security-related—Trump could face legal challenges as he seeks to approve new LNG projects.
- Public comment period: The study is in the final stages and is expected to complete by the end of the year, but the Energy Department has set a 60-day public comment period before finalising it. This could create a narrow window for the study to impact Trump’s actions once he takes office on January 20.
If the study concludes that increasing LNG exports is in the public interest, it could fast-track Trump’s energy plans. However, negative findings could complicate approvals and expose projects to legal challenges.
Kevin Book, managing director at ClearView Energy Partners, explains:
“If Trump wants to approve LNG projects immediately, but the study says ‘no,’ those approvals might become targets of legal scrutiny.”
What Does the LNG Study Examine?
The ongoing LNG study is designed to assess the climate change risks, economic benefits, and national security implications of increasing US LNG exports. Given that LNG projects are capital-intensive and have long timelines, any new findings could impact future project approvals and delay the construction of new terminals.
Here are the major areas under examination:
- Climate impact: Increased LNG exports contribute to global carbon emissions, which could make the Biden administration’s climate goals harder to achieve.
- Economic benefits: The study evaluates whether expanding exports would provide long-term economic benefits to the US, such as job creation and increased tax revenue.
- National security: As global demand for LNG rises, the study explores whether selling more energy abroad could threaten US energy security, especially during periods of high domestic demand.
Potential Impact on LNG Export Companies
The US has rapidly become a global leader in LNG production, and LNG export companies are eagerly awaiting new project approvals. However, the study presents uncertainty for key players in the industry, including Venture Global LNG, Energy Transfer LP, and Commonwealth LNG, which are hoping to build new export terminals.
Should the study highlight additional environmental or security risks, these projects could face months—if not years—of regulatory delays.
Impact on Key Players
- Cheniere Energy: As one of the biggest LNG exporters in the US, Cheniere operates export terminals in Louisiana and Texas. The company’s stock surged after Trump’s victory, reflecting investor confidence that the incoming president will approve new permits quickly.
- Sempra Energy: A major player in the LNG space, Sempra is developing an LNG terminal in Texas. CEO Jeffrey Martin stated in an earnings call that they are “growing more confident in securing the necessary permits” under a potential Trump administration.
- NextDecade Corp: With an LNG export facility in the works, NextDecade’s stock rose by a massive 15% following Trump’s win. The expectation is that the new administration will provide the necessary approvals to move projects forward.
The Trump LNG Agenda: A Global Push for US Energy Exports
When Trump takes office, one of his priorities will be to ramp up the US fossil fuel industry, with LNG at the forefront. The LNG export market has become a cornerstone of his energy policy, and he aims to further solidify the US’s position as the world’s largest LNG exporter.
- Pressure on global buyers: Trump is expected to pressure allied countries to purchase more US LNG, leveraging trade deals and geopolitical alliances to promote American energy abroad. His administration’s focus will be to increase US LNG exports to Europe, Asia, and other energy-hungry regions.
While Biden’s administration imposed a moratorium on new export licenses, Trump’s energy plan would likely reverse these policies, ensuring more LNG projects are approved and that US companies have the green light to sell LNG to the global market.
What Could Delay LNG Approvals?
Even with a Republican administration poised to approve new LNG export terminals, the ongoing study could cause delays:
- Legal challenges: If the study finds that new LNG projects could harm public interests, environmentalists and opposition groups may challenge permits in court.
- Public comments: The public comment period gives concerned groups time to voice their objections, possibly leading to revisions or amendments to the study.
- Regulatory hurdles: If the study calls for additional environmental assessments, it could set back the approval process for several months, or even years.
The Long-Term Future of LNG Exports
With the global demand for natural gas increasing, LNG exports will continue to play a significant role in the future of US energy policy. However, the balance between economic growth, environmental sustainability, and national security will remain a central challenge for any administration.
Key Takeaways:
- Biden’s LNG study could delay Trump’s plans for new LNG export terminals.
- Trump’s victory has already led to a surge in stock prices for US LNG companies, who are hoping for quick approvals.
- If the study produces negative findings, Trump could face legal hurdles when approving new projects.
- With new LNG projects requiring large capital investments and regulatory approvals, the study’s findings will determine how quickly projects move forward.
Conclusion: The LNG Race Is On
As the Biden administration rushes to complete its LNG study, it will be interesting to see how the Trump administration handles the findings. While the study could slow down project approvals, it might only be a temporary roadblock. The real challenge will be balancing economic growth, energy security, and environmental goals, all while navigating a global LNG market that is more competitive than ever.
