IGU says Biden export pause an “unsettling signal”

The International Gas Union (IGU) said January 30 US President Joe Biden’s direction to the Department of Energy to pause its review of LNG export applications to reconsider environmental impacts sends an “unsettling signal” to global energy markets.

“The current dynamic we are seeing unfold is highly worrying,” IGU Secretary-General Menelaos (Mel) Ydreos said. “It is eroding these fundamental market principles and will harm global energy security and emission reduction.” 

He said the US, as the world’s largest LNG exporter, has “revolutionised” the global gas market, liberalising it by introducing greater commercial flexibility in trade and contracts. 

This flexibility allowed the world’s energy systems to stay above water during the worst energy crisis in history, and the maintenance of flexible natural gas markets is critical to ensuring the success of the global energy transition and the safeguarding of international energy security.

A freely-operating global LNG market, the IGU said, provides “the best counterbalance to the politicisation of energy supply.”

LNG is playing a “key role” in providing supply security while at the same time keeping global emissions in check, the IGU said. Gas produces about half the greenhouse gas emissions of coal on a lifecyle basis, and in the form of LNG, with its “unmatched” scalability and flexibility, is a critically resilient resource in the energy transition, as demonstrated by its rapid deployment to offset the supply in Europe of Russian pipeline gas.

“Limiting the supply of gas into the global market will not reduce emissions,” Ydreos said. “It will do the opposite.”