A federal judge in Louisiana has blocked President Biden’s temporary halt on new LNG export capacity approvals. The ruling favored 16 states that had sued the federal government over the pause.
President Biden implemented the pause on new LNG export capacity permits in January, described by the White House as a response to pressure from climate activists who argue that LNG is more harmful to the environment than coal. They believe that expanding export capacity would exacerbate the climate crisis.
In response, 16 states, including Texas, Louisiana, and Florida, filed a lawsuit claiming that halting new LNG export permits would harm the U.S. economy and disrupt gas supply to European allies attempting to reduce reliance on Russian gas.
The states also argued that the suspension of permitting jeopardizes billions of dollars in investments, as reported by Reuters in March.
“The ban will drive away billions in investment from Texas, hinder revenue generation for public schools, force producers to flare excess natural gas instead of bringing it to market, and eliminate crucial jobs,” stated Texas Attorney General Ken Paxton.
Following the pause on LNG exports, U.S. shipments to Europe declined, although multiple factors contributed to this, including ample gas reserves in European storage facilities and competitive pricing compared to U.S. LNG.
The ruling by U.S. District Judge James Cain is expected to ease tensions within energy sectors affected by federal energy policies. Judge Cain deemed the government’s action arbitrary, capricious, and unconstitutional, finding that it violated the Natural Gas Act. He criticized the Department of Energy for exceeding its authority.
This ruling marks a significant development in the ongoing debate over energy policy and its implications for economic and environmental interests.