In Louisiana et al v. Biden et al a federal district court granted relief to 16 states by enjoining the DOE's pause in considering LNG export permits. The relief is not permanent. It means that the plaintiff-states have a likelihood of success on the merits.
The "Export Ban"
As you know, in January President Biden announced a "temporary", and perhaps indefinite, pause on pending decisions on whether to grant LNG export permits. The same day the DOE announced it was pausing determinations of applications to export LNG to non-Free Trade Agreement countries (Among others, all of Europe). The stated purpose was to update the assessments used to inform whether additional LNG export authorization requests are in the public interest.
The litigation
The complaint cited a number of violations of statute and the DOE's own history and policies; for example, it contradicted a July 2023 DOE decision which concluded that halting approval of LNG exports has no factual or legal basis.
Defendants moved to dismiss on several procedural grounds, all of which were denied and none of which are relevant for this discussion (apologies to administrative law buffs).
Bases for the decision
Here are (simplified) bullets explaining allegations cited by the court for the injunction Some are recited as facts and others as allegations that the court believed justify injunctive relief. They still must be proved:
- Exports are governed by the Natural Gas Act, the purpose of which is to encourage the orderly development of plentiful supplies of electricity and natural gas at reasonable prices.
- The DOE's regulatory authority extends to the act of transporting gas to and from the United States. It does not extend upstream to production or downstream to consumption.
- The NGA expressly instructs the DOE to ensure expeditious completion of all proceedings in which companies desiring to export gas to a foreign country apply for an export permit.
- The DOE has no discretion to delay ordering a hearing on an application.
- In denying a permit the DOE is required to make an affirmative showing that a permit would be inconsistent with the public interest.
- The NGA does not define the public interest but the term has been interpreted for years to mean to promote the orderly production of plentiful supplies of natural gas at just and reasonable rates.
- The National Environmental Policy Act requires a federal agency to prepare an environmental statement as part of major federal actions significantly affecting the quality of the human environment.
- In 2020 the DOE concluded that such an analysis is limited to considering only the potential environmental impact starting at the point of delivery to the export terminal and extending to the territorial waters of the receiving country.
- Environmental impacts of upstream and downstream activities are not within the scope of the DOE's environmental review.
- Page 7 of the opinion references damages claimed by the states and the industry.
- The Export Ban is contrary to law and exceeds the DOE's statutory authority.
- The Export Ban directly contradicts without explanation or logic the EPA's 2023 reaffirmation of its LNG export approval process based on its long-standing policy in statutory interpretation.
- There are massive economic benefits for US communities by providing global access to reliable US natural gas supply needed to further the global energy transition from higher GHG-emitting fuels to lower GHG-emitting natural gas.
- Exports of natural gas pay five times more than the sale of natural gas domestically. Thus, exporting natural gas is economically beneficial to the United States.
- The EPA's process is " ... completely without reason or logic, perhaps the epiphany (sic) of idiocy and ideography." (A Chamber of Commerce-ready quip if there ever was one.)
What's next?
For one thing, the election. Will this seditious, economy-busting pandering to the Greens end after November? Will the Administration simply ignore the injunction, as has been suggested? The damage to the affected states, the natural gas industry, and the country's economic health and national security are real.
Enjoining a refusal to act is an order that requires the defendant to act. What if the DOE and the president just pick up their administrative marbles and go home, ignoring the order by doing nothing while pretending to be doing something? They could delay the process interminably while our gas-producing foreign competitors develop their own market-share-stealing export capabilities.
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