Published
February 22, 2024
February 24 will mark the second anniversary of Russia’s invasion of Ukraine. The ongoing war has changed the course of world events in ways that will reverberate for decades to come.
Due to critical energy policy decisions made in the U.S. nearly a decade prior, Europe’s resilience to Putin’s attempt to destabilize the continent was immeasurably strengthened. But the Biden Administration’s decision to halt processing of LNG export licenses has cast doubt on America’s long-term commitment to its allies.
Within days of the invasion, German Chancellor Olaf Scholz delivered a major address setting forth a new era of German foreign policy aimed at responding to Vladimir Putin’s aggression. In addition to pledging a major expansion of military funding, Scholz’s declaration of “Zeitenwende”—a historic turning point—called for rapid diversification of European energy supplies away from dependence on Russia.
In a show of solidarity weeks later, President Biden and European Commission President Ursula von der Leyen announced a joint energy security task force committed to ensuring delivery of an additional 50 billion cubic meters (bcm) of U.S. liquified natural gas (LNG) to Europe through at least 2030.
Thanks largely to these commitments, U.S. LNG has replaced about half of lost Russian pipeline imports, helping Europe avoid the most disastrous circumstances that some predicted at the onset of the war. However, energy supply uncertainty and high prices have not been without consequences, as much of the European continent suffers from worsening deindustrialization.
The geopolitical value of this replacement gas to both U.S. and European interests is incalculable and indisputable. Nonetheless, our ability to deliver those cargoes was only possible due to the sound foresight of the Obama-Biden Administration in recognizing the threat-neutralizing potential of LNG more than a decade earlier.
It began in 2010 when Cheniere initiated America’s own LNG Zeitenwende by seeking federal authority to export natural gas from a once-planned import terminal. Submitted long before the escalation of Russian aggression in Europe, Cheniere’s license application emphasized the national security benefits of providing energy to our allies. The Obama Administration’s Department of Energy agreed, declaring such benefits explicitly part of the public interest determination upon which it based its approval:
"We have also considered the international consequences of our decision. … To the extent U.S. exports can diversify global LNG supplies, and increase the volumes of LNG available globally, it will improve energy security for many U.S. allies and trading partners.”
In a fitting coincidence, the first cargo of U.S. LNG left Cheniere’s Sabine Pass export terminal in Port Arthur, Texas, on February 24, 2016—a milestone reached exactly six years before the invasion of Ukraine. From that point forward, the rest was history. The U.S. passed Russia, Australia, and Qatar to become the world’s top exporter, and as of December 2023, more than 16,700 billion cubic feet—about $145 billion worth of LNG—has been delivered to 49 countries around the globe.
But Cheniere’s initial export license was never a sure thing. In fact, it was challenged every step of the way by the same organizations that cheered President Biden’s January decision imposing a moratorium on new LNG export licenses. If those initial challenges had succeeded, the consequences for Europe in light of Putin’s aggression would have been truly dire.
Fortunately, back then, the Obama-Biden Administration rejected activist calls to block America’s LNG Zeitenwende. Then-Vice President Biden explained their philosophy on the issue with clarity and conviction in a foreign policy speech centered on energy security following the Russian occupation of Crimea in 2014.
His remarks are worth revisiting in detail, as he repeatedly called for LNG infrastructure expansion in Europe, stating that “energy security is an especially vital regional security interest because of Russia’s track record in using the supply of energy as a foreign policy weapon against its neighbors in violation of basic commercial and international norms. This is a huge strategic problem for many countries that rely on Russia for their energy supply. But the truth is this is also a unique moment for Europe. Europe has a real opportunity to change their circumstances.”
Biden went on to say, “The region that was once almost entirely dependent on Russia has seized the initiative and now is on track to achieve greater energy security and not incidentally greater freedom. All this marks a genuine advancement in our agenda. But we can’t rest on our laurels. You all know better than I; we have to go much further. We have to finish the job. … I know a major obstacle is building the infrastructure. Some of the projects I just mentioned—the LNG terminal in Lithuania, for example, the reverse-flow interconnectors—they require long-term certainty to be commercially viable on their own."
Then-VP Biden’s speech should be instructive today: he not only foresaw the importance of LNG to neutralize Putin’s weaponization of natural gas, but he also correctly emphasized the need for long-term policy certainty to enable commercial viability of multi-billion dollar projects.
Unfortunately, his “pause” decision a decade later has done precisely the opposite: injecting massive uncertainty into the commercial viability of future projects viewed as critical to energy security. It reflects a complete about-face from his previous philosophy, which was proven to be correct.
This is especially important because the longer-term energy security concerns of our trading partners remain unsolved. Global demand for natural gas will be strong for decades to come, and American allies in Europe and Asia cannot diversify away from Russia unless and until sufficient alternatives become available. On a recent visit to Washington, D.C., Maros Sefcovic, Executive Vice President of the European Commission, put it simply: “The U.S. is now the guarantor of global energy security.”
There should, therefore, be no question that continued expansion of LNG export capacity remains in America’s public interest. As future facilities continue to encounter legal, financial, and political obstacles similar to those that preceded them, we should hope the immense energy security benefits of U.S. LNG receive the attention they deserve. The President should provide the long-term certainty he called for a decade ago and rescind his moratorium on LNG export licenses.
About the authors
Dan Byers
Dan Byers is vice president for policy at the U.S. Chamber of Commerce’s Global Energy Institute with a focus on environmental and regulatory issues, Byers develops and implements strategies in support of the Institutes broader education and advocacy efforts.
