In Texas, where the liquefied natural gas industry is an economic cornerstone and a key player in the global energy market, the implications of President Biden’s pause on new LNG export facilities are far-reaching.
Texas prides itself on being a major contributor to America’s energy independence and a vital source of natural gas for allies and developing nations. The pause threatens economic vitality, global energy security and counteraction to the influence of nations like Russia.
The lost economic potential is huge. According to Shell’s LNG Outlook 2024, global demand for liquefied natural gas is expected to reach 625–685 million tons per year in 2040, which is a 55 percent increase from current levels.
And while Secretary of Energy Jennifer Granholm recently said the pause would be lifted in less than a year, the opportunities may not simply pop back into place when the pause is lifted.
Since there is a greater capacity of global proposed projects than there is projected demand, the projects on the drawing board are in a race to get permit approval and long-term contracts signed, leading positive investment decisions.
The pause has therefore given a head start to the non-U.S. proposed projects, and the U.S. based projects may not be able to recover.
The Biden Administration cites outdated economic and environmental analyses, while overlooking extensive research demonstrating U.S. capacity to meet both domestic and international demand without significant price impacts.
Moreover, the policy contradicts the administration’s commitments to allies relying on U.S. LNG to diversify their energy sources away from geopolitical threats.
In fact, the most recent study by NERA Economic Consulting considered various increased demand scenarios, such as increased U.S. demand or European supply diversification. The results of the study show small price impacts, ranging from 5 cents to 10 cents per million BTUs in 2025, validating the results of prior studies.
If the administration is interested in helping American consumers, it should concentrate on pipeline infrastructure, which would lower prices by about 10 percent, or 25 cents per million BTUs in 2025, under all scenarios and between 25 cents and 40 cents per million in 2035.
For Texas, this pause stalls the momentum of an industry that has been a boon for the state’s economy, providing jobs, fostering technological innovation, and contributing significantly to local and national revenues.
Furthermore, limiting LNG exports from Texas risks conceding market share to countries with less stringent environmental standards, ultimately resulting in higher global greenhouse gas emissions.
Democrats in Congress have expressed concern, emphasizing the strategic importance of LNG exports. In a letter to President Biden, they pointedly stated, “Every molecule of U.S. LNG exported helps limit the growth of global emissions and provides energy security around the world.”
Biden’s pause could undermine his own objectives of promoting clean energy and reducing global emissions. It reflects a disconnect between environmental aspirations and the pragmatic needs of energy markets — both domestic and international.
For Texas and the nation, the path forward should be one of balanced, informed policy-making that supports economic growth, energy independence, and environmental stewardship.
Pinar Çebi Wilber is chief economist and executive vice President of the American Council for Capital Formation.
