Sixteen US states challenge White House 'pause' on LNG permits

Louisiana, Texas and more than a dozen other Republican-led states sued the Biden administration March 21 seeking to overturn its suspension on issuing key new LNG export permits.

The lawsuit in a federal Louisiana court argued that the White House ran afoul of the Natural Gas Act and flouted the Administrative Procedure Act when it hit "pause" on the permits in late January. The suit, filed in the US District Court for the Western District of Louisiana by sixteen state attorneys general, names President Joe Biden, the Department of Energy and agency officials as defendants.

The Biden administration announced the freeze Jan. 26 on reviews of new and pending applications to export LNG to countries that lack free trade agreements with the US until the DOE can update the underlying analyses it uses to determine whether the exports are in the public interest. The moratorium, which primarily affects proposed projects, has created uncertainty about the long-term market share of US LNG. Non-free trade agreement countries make up most of the global LNG import market, making the permits critical for major US LNG projects to get built.

The lawsuit asks a federal judge to find the permitting suspension is unlawful and to overturn it. The attorneys general also argued that the DOE ignored its own conclusion reached some six months before the announcement of the pause that the agency's existing public interest analysis did not need to be reexamined.

"Now—in the midst of an election year, and after a sustained pressure campaign from billionaire conglomerates, celebrities, 'influencers,' and banks—the Biden Administration acts as if its July 2023 Decision does not exist," the states argued. "The Administration likewise ignores the Natural Gas Act's presumption in favor of exports, decades of agency policy, and State and private reliance on exports."

The DOE did not immediately respond to a request for comment.

A host of energy attorneys and policy analysts have considered legal challenges against the permitting freeze likely since the White House announced it. But turning to courts to overturn the ban could prove difficult, since there was no order from the DOE and the action is essentially a delay, legal experts have said.

The states' legal challenge came days after US Energy Secretary Jennifer Granholm suggested the pause would be resolved within a year during a March 18 appearance at the CERAWeek by S&P Global conference in Houston. During the conference, US climate chief John Podesta said the studies to update the DOE's analysis would be ready for public "this summer."

Industry leaders at the conference, meanwhile, slammed the permitting freeze as harmful to the US economy, energy security and global decarbonization efforts.

The state attorneys general suing the administration argued the White House action "disregards statutory mandates, flouts the normal regulatory process, upends the industry, disrupts plaintiffs' economies, and subverts our constitutional structure."