06/09/2021 | Press release | Distributed by Public on 06/09/2021 19:44
Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
The Biden Administration's unclear policy on U.S. liquified natural gas exports and the infrastructure to support it is concerning investors and American allies.
On one hand, the Administration issued statements and directives indicating its policy rules out financing for 'carbon-intensive fossil fuel' projects. On the other hand, Department of Energy Secretary Granholm had this to say while speaking in North Dakota:
'Let me be clear. In our position as a global supplier of crude and natural gas and other forms of energy, traditional fossil energy is going to remain important, even as we work to reduce carbon emissions.'
These conflicting messages leave many around the world uncertain about U.S. LNG policy, especially since U.S. LNG exports are replacing dirty coal-fired power generation in many areas of the world - something that received policy support from former Secretary of State Hillary Clinton when she created the State Department Bureau of Energy Resources in 2011 to market U.S. natural gas to countries that wanted to replace coal. U.S. LNG exports enjoyed strong bipartisan support during the Obama Administration through this office and other agencies across government.
The ambiguity is troubling for some of America's closest geopolitical allies, including Japan, South Korea and India. These countries have little domestic natural gas supply and invested heavily over the last few decades to build the infrastructure needed to import U.S. natural gas and use it to generate power.
Japan sought to increase LNG exports after the Fukushima tragedy and subsequent reevaluation of nuclear power generation in the country. Without access to U.S. LNG, these countries may have little choice but to continue to burn coal for electricity, something that would increase global CO2 emissions and counteract progress elsewhere.
A clean energy partnership with India was announced during the April climate summit and made no mention of natural gas despite Prime Minister Narendra Modi's long-expressed desire to expand U.S. exports to India. Because natural gas infrastructure requires significant long-term investments, the Council is asking the Biden Administration to assure allies that the U.S. will continue to support LNG exports and the infrastructure projects necessary to receive them. In the march towards a lower carbon future, U.S. LNG is a valuable tool for the world to lower carbon emissions.
Recent reports by the IEA and others have shown that the U.S., and rest of the world, does not have sufficient supply of critical minerals to transition from fossil fuels at the pace many policymakers are suggesting. In response to these concerns, and dramatic supply chain disruptions in many sectors during the COVID crisis, the Biden Administration launched a 100-day review of critical supply chains.
This review was to determine whether U.S. supply chains are overly reliant on foreign suppliers, particularly China. In response to the findings, DOE will release a 10-year 'blueprint' for battery production, as well as provide $17 billion for manufacturing and recycling battery technology from its Loans Office.
The Administration also plans to create a cross-agency working group with corporations, tribes and other local governments to explore new mining and recycling options for rare earth minerals. DOE will provide $3 billion to support new projects.
The report findings and funding announcements show the Administration agrees that the U.S. must make significant investments in domestic critical mineral supply chains. We can expect continued government support for expansion of critical mineral production in the coming years.
For more information on the Council's advocacy efforts or to get involved, contact SVP Government Affairs & Counsel Tim Tarpley.Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Council's newsletter, which highlights sector-specific issues, best practices, Council activities and more.