The Honorable Joseph R. Biden, Jr. and the Honorable Jennifer M. Granholm (February 28, 2024)

Summary

Roger Williams, Chairman of the Committee on Small Business, writes to President Biden and Secretary Granholm on February 28, 2024, to express deep confusion and concern about the Department of Energy's decision to indefinitely pause export approvals for newly constructed Liquified Natural Gas (LNG) export terminals. The letter says over 90 percent of oil and natural gas extractors are small businesses and that the pause harms small producers and U.S. strategic interests. It requests information no later than March 13, 2024, including the number of small natural gas businesses impacted, available resources, and the evidence relied upon for the claim that the decision will reduce global emissions.

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Full text

                                             February 28, 2024

The Honorable Joseph R. Biden, Jr.                         The Honorable Jennifer M. Granholm
President of the United States                             Secretary
The White House                                            U.S. Department of Energy
1600 Pennsylvania Ave. NW                                  1000 Independence Ave. SW
Washington, DC 20210                                       Washington, DC 20585

Dear President Biden and Secretary Granholm:

        The Committee on Small Business writes to express its deep confusion and concern
regarding the Department of Energy’s (DOE) decision to indefinitely pause export approvals for
newly constructed Liquified Natural Gas (LNG) export terminals.1 Delaying the approval of
important LNG exports will have detrimental impacts not only on small businesses, but on the
U.S. economy and its strategic interests worldwide.2 In response, Qatar announced it would
expand its LNG export capacity, attempting to fill the void left by the Biden Administration and
limiting opportunities for U.S. small businesses.3 Currently over 90 percent of oil and natural gas
extractors are small businesses, and the Committee seeks a deeper explanation of this decision
and its impacts on those businesses and U.S. strategic priorities.4

         Natural gas is a growing and essential part of the American economy, making up most of
electrical production in the U.S.5 Over the last seven years, the U.S. has worked to improve its
ability to export this natural gas as LNG—by 2040 these exports are expected to contribute $73
billion to the economy and supply nearly half a million jobs.6 This decision upends years of
business planning and prohibits the natural gas industry from continuing its essential growth.
Taken with other actions by the Biden Administration, such as the Rice’s Whale rule, it seems
the Administration is set on making it increasingly difficult for small oil and gas operators,
particularly in the Gulf of Mexico region, to compete and earn a living.7


1
  Statement from President Joe Biden on Decision to Pause Pending Approvals of Liquefied Natural Gas Exports,
THE WHITE HOUSE (Jan. 26, 2024).
2
  Oil, Natural Gas, Our Economy and Small Business, SMALL BUS. & ENTREPRENEURSHIP COUNCIL (May 22,
2023); See also Emily P. Mallen, et al., Implications of US Department of Energy Decision to Pause Authorizations
of Liquified Natural Gas Exports May Extend Beyond Delays to Pending Projects, AKIN GUMP (Jan. 31, 2024).
3
  Ben Geman, Qatar Expands LNG Push as the U.S. Takes a Breath, Axios (Feb. 26, 2024)
4
  Oil, Natural Gas, Our Economy and Small Business, SMALL BUS. & ENTREPRENEURSHIP COUNCIL (May 22, 2023).
5
  Electric Power Sector Basics, ENV’T PROT. AGENCY (last visited Feb. 5, 2024).
6
  Impact of LNG Exports on the U.S. Economy: A Brief Update, ICF (Sept. 2017).
7
  The Economic Impact of Gulf of Mexico Oil and Natural Gas Vessel Transit Restrictions, AM. PETROLEUM INST.
(Nov. 5, 2023).
The Honorable Joseph R. Biden
The Honorable Jennifer M. Granholm
February 28, 2024
Page 2 of 3

        Additionally, U.S. LNG exports to Europe increased by 141 percent in the first year of
the Russo-Ukrainian war, as European countries shifted away from relying on Russian natural
gas.8 This export decision will force the U.S. to turn its back on our European allies and push
them back into the hands of the Russian Federation. This not only works against the U.S.’
strategic interests, but creates challenges for businesses, large and small, that had planned to
export their products to Europe and Asia over the coming years.9 Global opposition to Russia has
provided small U.S. natural gas producers an opportunity to replace Russian gas in foreign
supply chains. Limiting U.S. exports will reduce these opportunities for small businesses and
undermines America’s standing in the eyes of our allies.

         Lastly, though it is the crux of the reasoning behind the decision, it is unclear what
environmental benefit the DOE believes this rule will have. Germany, for example, likely does
not have sufficient gas or renewable energy to replace the U.S. LNG it would be expecting, but
has substantial coal reserves domestically that it will likely be forced to use.10 Additionally, the
failure to export sufficient amounts of American LNG will drive countries toward Russian LNG,
which has far fewer emissions controls, making it far more harmful to the environment.11 This
decision harms American industry without any clear environmental benefit or supporting
reasoning. Holding exports of American LNG, which meet U.S. environmental standards, in
favor of European and Asian coal or Russian LNG, is likely to harm the environment more than
simply approving these exports.12

       It is important for agencies to examine small businesses interests—which make up 99.9
percent of all businesses in the U.S.—when making such an impactful decision. America’s small
businesses deserve to have their voices heard and considered. We therefore request the following
information as soon as possible but no later than March 13, 2024:

        1. Please provide the number of small natural gas businesses impacted by this pause.

        2. Provide all resources available to small businesses to navigate this sudden policy
            change and how these resources will be communicated to small entities.

        3. Given that this rule puts all these producers in-flux with an “indefinite” timeline for
           the decision, how can small entities plan to restart their exports?




8
  Europe Was the Main Destination for U.S. LNG Exports in 2022, U.S. ENERGY INFORMATION ADMIN. (Mar. 22,
2023).
9
  Bradford Betz, Texas official blasts Biden admin for LNG export pause, warns millions of jobs at risk: 'war on
energy', FOX BUS. (Jan. 31, 2024).
10
   Riham Alkousaa. Germany Approves Bringing Coal-Fired Power Plants Back Online this Winter, Reuters (Oct. 4,
2023).
11
   Robert Rapier, How an American LNG Export Pause Could Increase Global Carbon Emissions, FORBES (Jan. 29,
2024).
12
   Id.
The Honorable Joseph R. Biden
The Honorable Jennifer M. Granholm
February 28, 2024
Page 3 of 3

           4. What alternative energy sources does the Biden Administration anticipate our
              European and Asian trade partners will utilize until exports from these terminals are
              approved?

                    a. If it is likely that most of these European and Asian countries will resort to
                       using more coal, what is the environmental justification for this action?

           5. Given that Europe is still so reliant on natural gas that it imports it from Russia, how
              much more money does the Biden Administration believe this pause will divert back
              into the hands of Gazprom and the Russian government, and away from American
              small businesses?13

           6. Provide evidence relied upon by the DOE that this decision will reduce global
              emissions instead of either exporting greenhouse gas production to other countries, or
              increasing emissions?

       To schedule your response or ask any related follow-up questions, please contact the
Committee on Small Business Majority Staff at (202) 225-5821. The Committee on Small
Business has broad authority to investigate “problems of all types of small business” under
House Rule X. Thank you in advance for your cooperation with this inquiry.


                                                In God We Trust,




                                             Roger Williams
                                                 Chairman
                                         Committee on Small Business



cc:        The Honorable Nydia M. Velasquez, Ranking Member
           Committee on Small Business




13
     Julia Payne, EU has no immediate plans to ban Russian LNG, says Spain's Ribera, REUTERS (Sep. 8, 2023).


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