How the gas industry took advantage of the war in Ukraine to change Biden’s policies

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The Russian tanks and armored vehicles had barely started rolling into Ukraine when the US fossil fuel industry sprang into action. A letter was quickly sent to the White House, urging an immediate escalation of gas production and exports to Europe in anticipation of an anticipated energy crisis.

The letter, dated February 25, just a day after Vladimir Putin’s forces launched their attack on Ukraine, pointed to the “dangerous moment” of the moment before turning into a list of demands: more drilling on US public lands; the swift approval of proposed gas export terminals; and press the Federal Energy Regulatory Commission, an independent agency, to green-light pending gas pipelines.

By the winter of 2022, there should be “virtual transatlantic gas pipelines” flowing from the US to Europe, the authors foresaw.

Six months after the letter, the Russian invasion has stalled and has retreated in some places, but the US gas industry has nearly achieved all of its original goals. Within weeks, the Joe Biden administration adopted the gas industry’s key demands as policy. They paved the way for new pipelines and export facilities, established a new task force to boost gas exports to Europe, and approved $300 million in funding to help build gas infrastructure on the continent.

“I can’t even begin to tell you how much momentum has changed for companies in the United States that have wanted to bring their projects forward and just haven’t been able to get long-term contracts,” said a cheering Fred Hutchison, chairman of LNG Allies, the industry group that produces the letter just three weeks after both military and lobbying activities began.

The rhetoric of the Biden administration, which described itself as deeply committed to tackling the climate crisis, had “changed significantly” within just a week, Hutchison noted. Biden’s creation of the gas export task force was a “direct response to LNG allies’ proposal,” the group boasted in March.

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But the embrace of liquefied natural gas — or LNG, gas that has been cooled to -260F (-160C), turning it into a liquid that can be shipped abroad — as an act of defiance against Putin has stunned climate activists who warn it will lock down decades of planet-heating emissions and push the world closer to climate catastrophe.

“The fact that just weeks after those demands were made, President Biden turned industry wishes into policy is a damning indictment of a president who had promised to tackle the climate crisis,” said Zorka Milin, senior adviser at Global Witness, who shared a new report on gas infrastructure escalation with the Guardian.

Milin said the US gas industry “licked its lips” at the start of the war in Ukraine. “There is no doubt that Biden’s apparent capitulation to the gas industry has opened the door for these companies to continue to benefit from the backs of those suffering in Ukraine, those living close to new gas infrastructure in the US and the millions affected. affected by global climate change,” she added.

LNG Allies, the operational name of the US LNG Association but does not disclose its members or donors, has won some notable victories since the start of the war. The group wanted six specific gas export applications to be expedited, and within three weeks the U.S. Department of Energy granted two, Cheniere Energy’s Sabine Pass project in Louisiana and the Corpus Christi operation in Texas.

The permits, which will enable the two facilities to export 0.72 billion cubic feet of natural gas per day, will act as a “key component of global energy security” by helping US allies in Europe, the department said, noting that US LNG exports are set to grow another 20% by the end of this year. Hutchison marked the news by declaring “two (licenses) down and four to go!”

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At the end of April, two more LNG export licenses had been issued. “Four down and two to go!” exclaimed LNG Allies in a press release. New gas terminals have lifespans measured in decades, which clashes with agreed climate targets: The International Energy Agency has said new fossil fuel infrastructure cannot be built if the world wants to avoid dangerous global warming.

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Undeterred, the Biden administration has vowed to supply the European Union with at least 15 billion cubic meters of gas by the end of 2022, equivalent to about half the amount of gas Spain burns each year. The Department of Energy did not respond to questions about how the new gas business fitted in with Biden’s goal of cutting U.S. emissions by half this decade.

The US only started shipping LNG abroad in 2016, but has now become the world’s largest exporter, surpassing longtime export leaders Qatar and Australia. Most of the gas is fracked in the Permian Basin, an oil and gas-rich region in Texas and New Mexico, before being piped and railed to the coast of the Gulf of Mexico, where it is cooled and ships are loaded.

Three export facilities under construction on the coast will further cement U.S. dominance of the sector when fully operational by 2025, wedged in a landscape already thick with petroleum refineries and plastic companies creating severe air pollution and noise affecting local residents, mostly humans. of color.

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Much of the new gas infrastructure will not be operational in a number of years, which may well be beyond the timeframe of the Russia-Ukraine conflict, which has put pressure on supplies and increased gas prices. According to Clark Williams-Derry, an analyst at the Institute for Energy, so much LNG exports are planned or under construction, representing about half of all total gas production in the US, that it is likely to lead to a rise in gas prices for domestic US users. Economics and financial analysis.

“It’s starting to eat into the amount of gas available to household consumers,” Williams-Derry said. “We will see very serious consequences for domestic gas prices in the US. We will see the consequences for as long as the eye can see.”

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However, the crisis in Ukraine has caused several LNG companies to record record profits this year. Exporting company Cheniere earned $3.8 billion more in cash from its operations in the first half of 2022 compared to the same period last year, while Sempra, a gas liquefaction company, saw an eightfold increase in LNG sales to Europe has gone through.

Gas has long been touted as a useful ‘bridge fuel’ for tackling the climate crisis, as it emits less carbon dioxide than coal or oil and provides energy for processes such as steelmaking that cannot yet fully handle renewables. “The choice right now is not gas or renewables – it’s gas or coal. Gas can help with that clean energy transition,” said David Dismukes, an energy expert at Louisiana State University.

“The news at this point will lubricate the wheels for more LNG development as it is going to be a rough winter for Europe.”

But the extraction, transportation and liquefaction needed to make LNG for export creates nearly as many emissions as burning the gas itself, according to a 2020 analysis from the Natural Resources Defense Council (NRDC).

The NRDC said these additional emissions mean that LNG’s impact on greenhouse gas emissions is “only modestly smaller than that of other fossil fuels at best.” A major problem is that gas drilling produces a large amount of methane, a potent greenhouse gas that is much more effective at retaining heat than carbon dioxide.

Climate activists argue that the US and Europe should instead invest heavily in renewable energies such as solar and wind power, to reduce future price shocks and emissions. “Russia’s aggression in Ukraine, rising energy prices and the devastating impacts of climate change should be the biggest trigger yet to end the world’s dependence on fossil fuels,” Milin said.

“Instead, an already rich industry is trying to seize the moment and force the world to make the same mistakes that led us to this situation.

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