US district court lifts ‘pause’ on LNG export permits

A federal district judge in Louisiana ordered the Biden administration to lift a suspension on issuing key LNG export permits for new projects until the court can resolve a lawsuit by 16 Republican-led states who argued it was unlawful.

The July 1 order out of the US District Court for the Western District of Louisiana represented a potential blow for the White House following its January decision to hit “pause” on the approvals, pending an update to the analyses that the US Department of Energy uses for determining whether the exports are in the public interest. But it was not immediately clear how the order could be enforced. The judge did not specifically order the DOE to approve export licenses or set a deadline for the agency to act on pending applications.

“The US Department of Energy disagrees with today’s ruling,” a DOE spokesperson said in an emailed statement. “The Department continues to review the court’s order and evaluate next steps.”

The order by Judge James Cain said administration officials are “enjoined and restrained” from “halting and/or pausing the approval process” for the permits, “effective immediately, to remain in effect pending the final resolution of this case, or until further orders from this Court, the United States Court of Appeal, or the Supreme Court of the United States.” The authorizations allow exports to countries that lack free trade agreements with the US, and they are critical because such countries make up most of the global LNG market.

Cain said in the order that states who argued the permitting freeze was arbitrary and capricious were likely to succeed on the merits of that claim, saying the DOE had failed to provide a “detailed justification” for halting the approval process when it had continued to process applications during previous updates to the agency’s analyses.

“While the Court agrees with Defendants that updating certain studies has been part of the process for obtaining information upon which the public interest determination is made, the decision to wholesale halt the process of approving applications for non-FTA countries is a complete reversal of how the DOE processed these applications in the past,” Cain wrote.

Biden administration officials have said they expect the LNG policy review to be completed by early 2025. But the permitting hold, widely viewed as a political move, has put several projects that have yet to reach a final investment decision in limbo.
Source: Platts