Biden administration

There’s no doubt about it: The Biden administration’s decision to pause approval of LNG export licenses  poses a new threat to a number of projects thought to be nearing a final investment decision (FID). The questions brought on by the move are profound: how big of a problem is this for U.S. developers, how does the timeout affect the projects now in limbo, and — over the longer term — what does the added uncertainty regarding incremental LNG exports mean for U.S. crude oil and natural gas production and what does it mean for the global energy landscape? In today’s RBN blog, we discuss the factors that led to the administration’s announcement — and the case to be made that expanded LNG exports are in the U.S.’s economic and strategic interest. 

In the next few days, U.S. Energy Secretary Jennifer Granholm will hold an emergency meeting with leading energy executives to discuss steps E&Ps and refiners could take to increase crude oil production, refinery capacity and the production of gasoline, diesel and jet fuel, all with the aim of reducing prices. The prelude to the get-together was less than ideal, though. In a June 14 letter to the top brass of four integrated oil and gas giants and three large refiners, President Biden criticized them for “historically high refinery profit margins” and for shutting down refining capacity before and then during the pandemic. In addition to rejoinders from the companies, the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM) defended their actions, discussed the complexity of refined products markets, and asserted that the Biden administration’s statements and policies have actually discouraged investment in refining and oil and gas production. Is there a middle ground here? In today’s RBN blog, we look at the high-level correspondence and discuss how at least some compromises might be possible.