Texans praise court ruling halting Biden LNG export ban, remain cautious

Texans are praising this week's ruling halting a partial liquified natural gas (LNG) ban imposed by the Biden administration.

Judge James Cain Jr. of the Western District of Louisiana issued a preliminary injunction against the U.S. Department of Energy's partial LNG export ban in a lawsuit filed by a coalition of states led by Louisiana and Texas, the Gulf states that lead the U.S. in LNG exports.

Cain said the ban was implemented “completely without reason or logic and is perhaps the epiphany of ideocracy."

The states argue the ban was unconstitutional and a political ploy in an election year after U.S. LNG exports and domestic natural gas consumption broke records, The Center Square reported.

Texas leads the U.S. in oil and natural gas production and in LNG exports, providing a lifeline to European countries previously dependent on Russian oil, The Center Square first reported. A senior advisor to the president, John Podesta, recently acknowledged the critical role of U.S. LNG exports earlier this year.

“The US is now the number one producer of oil and gas in the world, the number one exporter of natural gas, and that’s a good thing, because following the illegal invasion of Ukraine, and the need that Europe had to rely on different sources rather than Russia fossils, it was important that the US could step up and supply a good deal of that need,” he told The Guardian.

But after the administration implemented the ban, LNG exports declined, causing concern in the industry.

While the court’s decision “is certainly something to celebrate, how the Biden administration responds will be even more critical because we're already seeing impacts from the LNG pause,” Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association (TIPRO), told The Center Square.

“The Administration’s pause caused global uncertainty in America’s ability to supply reliable, affordable energy, leading to a 15% drop in LNG Sale and Purchase Agreements in the first half of 2024, compared to the same time period in 2023. This enabled suppliers in Asia and Canada to step in and acquire larger market shares, and Russia to once again become the largest natural gas supplier to Europe,” he said.

Pointing to the administration aggressively halting lease sales on federal land and offshore, he said, "As we saw with the stay on the federal oil and gas leasing pause at the beginning of this administration, court orders don't necessarily translate into immediate action from the Biden administration. And that's what we need right now – real and immediate evidence that the administration will review permits expeditiously to reduce the uncertainty in the markets."

The court ruling “means Biden’s illegal ban does not prevent Texas natural gas from reaching market while the lawsuit continues … producers can take their natural gas to market instead of flaring it. This will protect Texas jobs and keep our critical energy industry running,” Texas Attorney General Ken Paxton said.

It also “achieves the right result,” Texas Oil & Gas Association president Todd Staples said. “U.S. natural gas has ushered in a new era of energy security by providing for needs here at home and to allies around the globe.”

The Biden administration implemented the ban claiming LNG exports increased domestic energy costs and methane emissions, contradicting federal data, The Center Square reported.

In contrast to the administration’s approach, Texas’ governor, legislature and voters supported creating a new $5 billion Texas Energy Fund to primarily advance natural gas development and infrastructure.

On the same day as the court ruling, Gov. Greg Abbott and Lt. Gov. Dan Patrick issued a joint statement saying they were prioritizing fast-tracking building more dispatchable energy, seeking to expand the program by another $10 billion.

“Texas has already received notice of intent to apply for $39 billion in loans [through the Texas Energy Fund], making the program nearly eight times oversubscribed. With the new projections for 2030, we will seek to expand the program to $10 billion to build more new plants as soon as possible,” they said.

They’re referring to a recent projection that Texas is expected to need nearly double the energy to power its grid by 2030. The need is due to several factors, including more residents and businesses relocating to Texas, Texas being the energy capital of the U.S., and record demand for domestic natural gas consumption largely made possible by Texas producers.