Chevron CEO attacks Biden LNG export pause on costs, carbon

The oil and gas industry is focusing on the Biden administration’s moratorium on new liquefied natural gas export permits as a key policy they want changed under the incoming US president.

Chevron Corp. Chief Executive Mike Wirth called on the administration to reverse the pause, labeling the policy a failure that “expresses politics at the expense of progress.” The permit freeze, which took effect earlier this year, will raise energy costs, threaten supplies to America’s European allies and increase emissions by slowing the transition from coal to gas, Wirth said in a speech at the GasTech conference in Houston Tuesday.

“When it comes to promoting economic prosperity, energy security and environmental protection, a pause that allows LNG fails all three,” he said. “The administration should stop attacking natural gas and embrace the benefits it already provides around the world.”

In January, the White House halted new LNG export licenses, citing the need to take a closer look at how shipments affect the environment and national security. The ruling sent shockwaves through the industry, threatening to end a boom in Gulf Coast terminal construction that has turned the US into the world’s largest exporter of the super-refrigerated fuel.

“In Australia and the US, we are seeing some agitation in terms of support for the industry,” said Meg O’Neill, CEO of Woodside Energy Group Ltd. “I worry that there will be a long-lasting wave of concern in key nations that buy LNG caused by the outage, even if the outage is short-lived.”

The industry has rejected the policy as it grapples with a glut of natural gas, largely a byproduct of shale oil production. A federal judge in Louisiana lifted the temporary moratorium in July after several states sued. While the Department of Energy is appealing the decision, it also granted an LNG export license following the decision.

“We can double down on the ‘either/or’ approach that dominates today’s discourse, which too often pits people and solutions against each other,” Wirth said. “Or we can move to an all-in approach that recognizes that many solutions are needed.”

Both US presidential candidates have expressed support for fracking, which accounts for the majority of US oil and gas production. But some executives are still worried about what Democratic nominee Kamala Harris might do in the White House, given her current role as Biden’s vice president. She has not yet considered whether she will lift the LNG ban.

“We hope cooler heads prevail and maybe she’s being honest,” said Jack Fusco, chief executive of Cheniere Energy Inc., an LNG exporter. “I have to trust until I don’t.”

Wirth said the LNG hiatus was self-defeating because natural gas is replacing more polluting coal in power generation in many cases. In recent years, environmental groups have questioned the claim, citing the often undocumented methane emissions in gas collection systems and the amount of energy required to cool the LNG.

The CEO said the emissions the U.S. avoided by switching to coal gas are more than double the reductions from all the wind and solar power added over the past 15 years, citing data from McKinsey & Co.

The global shift from coal to gas “could represent the largest carbon reduction initiative in history,” he said.

It will also be vital to the development of artificial intelligence, he said.

“The advance of AI will depend not only on the design labs of Silicon Valley, but also on the gas fields of the Permian Basin,” Wirth said.

Even with the permit hiatus, the U.S. is on track to double LNG export capacity by 2030, securing supplies for allies afterward, said Brad Crabtree of the Energy Department.

“It’s not enough to say that natural gas will replace more greenhouse fuels like coal and oil,” he said. “Industry must demonstrate, through concrete action, a credible path that puts natural gas firmly on the path to net zero emissions by 2050.”

Last year, participants at the United Nations Climate Change Conference agreed to phase out fossil fuels for the first time, while also giving way to natural gas as a transition fuel.

Even so, Wirth called for a “more balanced conversation about the future of energy.”

“These elections should be based on real science and unbiased data, unswayed by advocacy agendas,” he said.

Photo: Mike Wirth, chairman and chief executive officer of Chevron Corp., speaks during the 2024 CERAWeek by S&P Global conference in Houston, Texas, US, Tuesday, March 19, 2024

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