U.S. Gas Policy Fell Flat in 2023: The Climate Demands Better

Many thanks to energy analyst Talia Calnek-Sugin for her contributions to this piece.

During 2023, the U.S. became the world’s largest exporter of Liquefied Natural Gas, commonly known as LNG. But we didn’t reach this point overnight. For years, the Federal Energy Regulatory Commission and the U.S. Department of Energy have charged ahead in approving projects at a rapid clip—without issuing guidelines to assess the impacts of shipping and burning gas on our climate or the communities most affected by energy development. 

This gas milestone is an inflection point in the wrong direction, and one that came about in the face of endless advocacy from communities and environmental justice groups on the frontlines of the climate crisis, who bear the worst health and pollution risks of these projects.

Federal regulators and policy makers failed to finalize initiatives that would ensure gas projects actually benefit the public and, as a result, 2023 will go down as a lost opportunity to put climate leadership ahead of short-term corporate profit. 

Plenty of Blame To Go Around

Natural gas is largely composed of methane, a greenhouse gas that is 80 times more potent than carbon dioxide. The unfettered expansion of U.S. gas production, driven by LNG exports, is widely expected to restrict or eliminate any path for the U.S. to meet near and long-term climate goals. 

Coming into this year, given public statements and the urgency of the moment, we were optimistic about the opportunities for reform. Unfortunately, the U.S. failed to meet the moment, and there's plenty of blame to go around.

FERC

Under federal law, FERC cannot approve any gas infrastructure that is inconsistent with the public interest. This federal mandate notwithstanding, since 1999, FERC has approved nearly every pipeline and LNG terminal application it has received, often ignoring or marginalizing evidence that a project is unneeded or harmful. In 2022, after years of deliberation, FERC issued a revised Certificate Policy Statement that properly assessed impacts on climate, communities, and markets. FERC also issued an interim Greenhouse Gas Policy Statement to broaden its framework for evaluating climate impacts. Together, these policies were intended to bring FERC reviews into compliance with the law and ensure that climate and environmental justice mattered. 

Sadly, after quick and relentless industry pushback, both initiatives were reverted to draft status and have yet to be finalized. Meanwhile, communities in the shadow of gas infrastructure, such as Port Arthur, Texas (one of the poorest cities in Texas), say their concerns over displacement, pollution, and climate change have been ignored. Similarly, FERC approved the Commonwealth LNG project in southwest Louisiana, despite it being next door to an already burdened environmental justice community. 

DOE

Not to be outdone, the DOE, after a 10-year delay, refused to open a rulemaking to revise its assessment guidelines that would account for climate change, environmental justice, and market pricing issues in its review of LNG exports. DOE hasn’t updated its guidelines since 1984 when, under the Reagan administration, the goal was to increase LNG imports considering the 1970s energy crisis. DOE still uses this inapposite and outdated guidance to review LNG exports in 2023. 

This outdated review led to DOE approving LNG exports from the enormous Alaska LNG project. The Biden administration found that the project had economic and international security benefits and that opponents failed to show exports were not in the “public interest.” 

Polling shows strong support for limiting LNG exports. According to a recent survey of 1,270 people by Data for Progress, respondents by a two-to-one margin said they support measures to curtail gas exports. Nevertheless, the federal government continues to rubber stamp LNG projects without taking into account impacts on climate or communities. 

Congress

Amid all that, the Mountain Valley Pipeline, a dangerous, unnecessary project that is already harming communities, the climate, water resources, endangered species habitat, and public lands, advanced thanks to a political deal secured in unrelated legislation to extend the U.S. debt limit. This agreement cut local voices out of the process, sidestepped laws meant to protect the public from a project rural communities rejected from the start, and locked future generations into fossil fuel dependency. 

Geopolitics certainly factored into greenlighting gas projects, after Moscow cut shipments to Europe in response to Western sanctions following its invasion of Ukraine. But that hasn’t stopped U.S. overseas investment in LNG or domestic project approvals from undermining the U.S. position as a global climate leader. And despite claims to the contrary by project developers, any projects proposed today wouldn’t be online for nearly a decade, making any argument that they could help the current geopolitical situation a red herring. 

There Were Some Bright Spots 

Still, there were some bright spots in 2023. In September, the U.S. Department of Transportation finally suspended a Trump administration rule that allowed LNG transport by rail without a special permit. Along with exacerbating the global climate crisis, moving LNG on trains exposes communities to the risk of explosions, choking clouds, and uncontrollable fires. A mere 22 tank cars of LNG hold the explosive energy equivalent to the Hiroshima atomic bomb. 

In April, the DOE issued a policy statement reaffirming a seven-year deadline for approved LNG projects to begin exports. That determination factored into its decision in June to deny Energy Transfer’s request for a second deadline extension for its Lake Charles LNG project. Energy Transfer has requested a new license for the facility. 

Lastly, in a move that won’t affect permitting, but will have a major impact on the climate, the Biden administration unveiled rules to crack down on methane from drill sites, gas pipelines, and other oil and gas equipment. The regulations are expected to prevent 58 million tons of methane from leaking by 2038—about the same as all the CO2 emissions from the power sector in 2021, according to the U.S. Environmental Protection Agency. Plugging methane leaks will also lessen the impacts of gas development on environmental justice communities. However, the new regulations should not be taken as green light to build more gas terminals and pipelines. Even with zero leakage, methane gas is a fossil fuel and is warming the planet. 

We Need To Go Much Further

Those developments are welcome, but we need to go much further. After a disappointing year, there’s a lot of room for improvement for U.S. LNG policy and now is a great time to pivot. 

FERC can begin by breaking out of its historical malaise and finally take steps to seriously weigh the impact of gas projects on neighboring communities. FERC held an environmental justice roundtable in March and heard firsthand of the high toll imposed by gas projects. Yet on the heels of that event, it issued orders in two LNG cases that showed ‘’a disturbing lack of commitment to making true and meaningful changes to FERC’s handling of environmental justice concerns,” according to comments submitted by NRDC and other public interest groups. FERC must do more to include public participation, ensure that its assessments capture all public and health costs and fully account for those impacts when weighing the purported public benefits of more gas. 

FERC has never credibly analyzed the true social costs of gas development, a point highlighted by Commissioner Allison Clements. Clements has voted in favor of LNG projects, including one that would expand a gas line to New Jersey, though she rejected the conclusion of a majority of members that FERC cannot assess the significance of greenhouse gas emissions from LNG projects. ‘’The Commission has not seriously studied the answer to that question,’’ Clements wrote. 

DOT must finalize the decision to suspend LNG-by-rail transport, which is in effect until June 30, 2025. Local governments in New Jersey, Pennsylvania and Delaware have passed resolutions against LNG-by-rail. Now it’s up to the DOT to pass a rule to fully prohibit the dangerous process. 

Finally, DOE must change course and update its policy on LNG exports and give the public—especially vulnerable communities—a real opportunity to weigh in. Over 60 members of Congress recently wrote U.S. Energy Secretary Jennifer Granholm urging the DOE to finally update guidelines to determine if LNG projects are really in the public interest. In short, the DOE and FERC must stop stonewalling and do what common sense and the law require. 

We’re optimistic that 2024 can be the year we all need.