Editorial Comment

T. CAMPBELL, Managing Editor

In January, the Biden Administration (U.S.) announced a pause on all pending approvals for gas export facilities. The U.S. Department of Energy (DOE) will stop approvals for liquified natural gas (LNG) exports to assess the effect on climate change and danger to surrounding communities. This pause only applies to new LNG projects (12 have been affected) and not facilities already in operation. Two notable projects are the expansions of the Port Arthur LNG and Cheniere's Corpus Christi LNG midscale facilities, both of which are along the U.S. Gulf Coast. 

The decision has faced controversies, with many U.S. oil and gas representatives raising concerns about the energy security of the U.S. and allied EU nations. According to the U.S. Energy Information Administration (EIA), the U.S. is the world’s top LNG exporting country and exported a record high of 11.6 billion cubic feet per day (Bft³d) in the first half of 2023.¹ This is due largely in part to Russia's invasion of Ukraine. 

According to the DOE, one aspect of this pause is to determine if LNG exports from the U.S. are slowing the adoption of green hydrogen (H₂) in Europe. This concern is not without merit. Without LNG, the adoption of green H₂ will be a necessity. However, this concept may work better in theory. According to the International Energy Agency (IEA), only 4% of the potential H₂ production projects globally have reached a final investment decision (FID).² It is unclear if this halt on LNG exports will jump-start H₂ production potential (FIG. 1).

Concurrently, the U.S. Treasury has published proposals to regulate the H₂ production tax credit offered under the U.S. Inflation Reduction Act (IRA). With these green H₂ incentives defined, more projects may reach FID as developers and financial backers know what credits they will qualify for.H₂T

¹ EIA, “U.S. exports of natural gas set a record high in the first half of 2023,” October 2023, online: https://www.eia.gov/todayinenergy/detail.php?id=60582# 

² IEA, “Executive summary,” 2023, online: https://www.iea.org/reports/global-hydrogen-review-2023/executive-summary