20.1 C
Delhi
Tuesday, March 5, 2024

Biden’s LNG ban dangerous for industry’s future – energy bosses

Washington paused approvals for new gas export terminals for what it called climate-change reasons

The temporary halt of approvals for new LNG export terminals by the administration of US President Joe Biden will undermine trust in the industry, Shell CEO Wael Sawan told the Financial Times in an interview on Sunday.

“I don’t think the recent announcement by the administration necessarily impacts, in the short or medium term, the supply of LNG, but I do think it erodes confidence in the longer term,” Sawan said. 

The response comes as the British energy multinational, the world’s second-biggest LNG shipper after Qatar Energy, has found itself in a legal dispute with US exporter Venture Global LNG. In September, Shell along with BP launched separate arbitration proceedings against Venture Global for allegedly refusing to honor a multibillion-dollar supply contract.

ADVERTISEMENT

Sawan added that Biden’s decision, compounded by Venture Global moving towards “not honouring the contracts with their foundation buyers” starts to raise more questions about “the stability and security of LNG from the US.”

Kathy Mikells, chief financial officer of ExxonMobil, criticized the White House’s decision as well, saying that such bans undermine efforts to wean energy-consuming nations off of coal.

“It means less US produced natural gas is available to replace coal around the world – that’s clearly a bad thing,” she said in an interview with FT.

Read more

ADVERTISEMENT
RT
Western Europe’s energy supply ‘vulnerable’ – Bloomberg

Chevron CFO Pierre Breber added that energy policy should not be a question of politics. “The world needs affordable, reliable, ever-cleaner energy,” he told the outlet. “US LNG exports are good for this country: it creates jobs, it helps the balance of trade. It’s good for our allies who are looking for sources of energy . . . And it’s good for the environment, because . . . in many instances the LNG is [replacing] coal.”

Biden ordered a pause on approvals for LNG exports from new projects in the country on January 26, citing their potential contribution to climate change. However, many large producers have vocally opposed the move, emphasizing that LNG plays a vital role in the energy transition. The super-chilled fuel produces half the carbon dioxide of coal for the same amount of energy and 30% less than oil.

The controversial decision has also sparked anger among Republicans in the House Committee on Energy and Commerce. The lawmakers said the halt inevitably weakens global energy security and undermines US efforts to help the EU reduce reliance on Russian energy.

Since the start of the Ukraine conflict, the bloc has become increasingly dependent on LNG shipments from the US as it tries to replace pipeline gas from Russia. Committee Chair Cathy McMorris Rodgers called Biden’s decision “another gift to Putin.”

ADVERTISEMENT

However, industry experts polled by Foreign Policy magazine believe that in the short term, the suspension of LNG exports won’t have a major impact on the market or on EU energy security.

For more stories on economy & finance visit RT’s business section

February 05, 2024 at 09:30PM
RT

ADVERTISEMENT

Most Popular Articles