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Biden’s LNG Export Pause Hits Ukraine
Kyiv’s deal with a major U.S. supplier faces a White House obstacle.
By
The Editorial Board
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Updated June 21, 2024 7:06 pm ET


Good news: Ukraine last week struck a major deal with a U.S. liquefied natural gas (LNG) supplier to help wean Eastern Europe off Russian natural gas. The bad news: Standing in the way of the deal’s success is President Biden.

Europe has diversified its energy supply since Russia’s Ukraine invasion, notably by importing more LNG from the U.S. But many countries still depend on Russian gas that travels through a pipeline that crosses Ukraine. A five-year transit agreement with Russia’s Gazprom expires at the end of this year, and Ukraine doesn’t intend to renew it.

The agreement’s expiration has hastened the imperative for the region to procure alternative supply. That’s why Ukraine’s largest private energy company, DTEK, last week signed a deal with Virginia-based Venture Global. DTEK would buy LNG from Venture Global’s Plaquemines facility “to support near to medium term energy security needs for Ukraine and the broader Eastern European region.”

Under the deal, DTEK will also be able to purchase up to two million tonnes of gas each year—enough to heat about 28 million homes for one month—from the company’s CP2 facility that is underway. Yet there’s a big hitch: CP2 is ensnared in the Administration’s moratorium on new LNG export projects, which could continue if Mr. Biden wins re-election.

In January Mr. Biden surrendered to an army of TikTokers by halting permits for new LNG export projects, supposedly while the Energy Department studies their environmental impact. DOE must approve permits to export LNG to countries with which the U.S. doesn’t have free-trade agreements to ensure they are in the “public interest.” This includes Europe and Ukraine.

You’d think the Administration would greenlight any project that helps Europe and the rest of the world break their dependence on Russian energy. Russia still accounts for about 15% of Europe’s gas supply. Last month Europe imported more gas from Russia than the U.S. for the first time in nearly two years amid problems at a U.S. LNG facility.

If Europeans can’t get gas from the U.S., they will have to turn to Russia. The same goes for other countries. CP2 could supply about 5% of the world’s LNG by 2026. It already has contracts with Germany and Japan in addition to eastern Europe. Yet climate activists have made stopping LNG exports a cause celebre. CP2 is their new Keystone XL pipeline.

Biden officials have told allies not to worry, and that the Administration’s permitting pause won’t have an immediate impact on U.S. LNG exports. But worry is appropriate. The moratorium has caused enormous political uncertainty about the future supply of U.S. gas. If Mr. Biden wins re-election, will he spurn his progressive supporters by approving CP2 and other LNG projects? Our guess is he’ll make the moratorium permanent.

Mr. Biden presents himself as a more reliable ally than Donald Trump. But his LNG embargo shows that his overriding loyalty is to the climate lobby.