US Reviews of Gas-export Permits Slow Under Biden Administration

U.S. Department of Energy reviews for liquefied natural gas (LNG) export permits have lengthened under President Joe Biden's administration to 11 months or more, from seven weeks, according to government data.

The delay could mean nearly completed LNG projects may not being able to supply big European buyers because of a lack of the permit. Increasing LNG exports is opposed by some U.S. industries who fear it could raise domestic prices, while environmental groups have raised concerns about continued expansion of a fossil fuel industry.

Big swaths of U.S. industry - ranging from chemicals, steel, food and agriculture - oppose unrestricted exports of U.S. gas. Export permits represent the most significant limit thus far on an industry hoping to add 50% more to U.S. export capacity by 2026.

The average time for issuing an export license for supplying the superchilled gas to some of the biggest buyers of U.S. LNG, non-Free Trade Agreement (non-FTA) countries, has climbed under the Biden administration to over 330 days from 155 days under the Obama administration and 49 days under the Trump administration, according to DOE data.

One project, Commonwealth LNG, has been waiting a year after receiving its environmental approval for a permit. Its Cameron, Louisiana, project hopes to start construction in the third quarter of next year with preliminary deals for the sale of 5 million metric tons per annum (MTPA), mainly to non-FTA countries.

"Non-FTA approval is essential for any U.S. LNG facility to operate effectively in supplying its product in a global market," said Commonwealth LNG spokesperson Lyle Hanna.

While non-FTA approvals have taken longer recently, the company anticipates receiving its export permit in the near future and the DOE has not raised any issues or concerns with its application, Hanna said.

New Fortress Energy (NFE.O) filed 11 months ago for a non-FTA authorization for its Altamira FLNG facility, which is near to starting production. But the 1.4 MTPA project will be unable to sell its gas to countries including the Netherlands, U.K., France, Spain and Germany.

New Fortress did not respond to a request for comment.

"We now on average, wait about 500 days for an LNG export authorization," said Dan Brouillette, former president of Sempra's (SRE.N) LNG development unit and president-elect of utility lobby group, Edison Electric Institute. His measure is larger than Reuters average count for companies that have the required environmental approval in hand.

A DOE spokesperson said the agency would not comment on specific projects, but said it considers more than environmental approvals in its non-FTA decisions. It has approved non-FTA authorizations for projects representing almost 45% of the about 103 billion cubic feet per day production of domestic dry gas, the spokesperson said.

“There are many factors that can affect the amount of time the U.S. Department of Energy (DOE) needs to review an application, including the issues raised by interveners in any specific proceeding," the spokesperson said.

Non-FTA countries are the biggest buyers of U.S. LNG, but the Biden administration's DOE has slowed decisions for economic, political and environmental reasons, says Alex Munton, an LNG analyst at energy consultancy, Rapidan Group.

The DOE "is evidently sitting on decisions because of politics," he said. "Without these permits, projects cannot move forward. We're heading toward 2024 elections and the Biden administration is keenly aware of the potential for a political backlash.

(Reuters - Reporting by Curtis Williams and Valerie Volcovici; Editing by David Gregorio)