By Jarrett Renshaw and Timothy Gardner
(Reuters) - Advisers to U.S. President-elect Donald Trump are urging him to take a patient approach to restarting approvals for liquefied natural gas export licenses, fearing rapid approvals will only get overturned in court, according to two sources familiar with the discussions.
The recommendations offer a preview of the challenges Trump will face as his bold campaign promises to slash regulation and unfetter industry crash into the reality of governing an unwieldy bureaucracy.
In an election-year move, current President Joe Biden halted new LNG export licenses and ordered his administration to conduct a review of the U.S. LNG industry last January after pressure from environmentalists concerned about greenhouse gas emissions.
The moratorium delayed projects including Venture Global's CP2 project, the Commonwealth LNG plant, and Energy Transfer (NYSE:ET)'s Lake Charles complex, all in Louisiana.
Trump vowed on the presidential campaign trail to undo Biden's pause and swiftly approve the projects awaiting an LNG export license.
He plans on issuing an LNG-specific executive order on his first day in office later this month, but the details of the order remain a matter of debate, as advisers balance political urgency with protecting the export projects from protracted legal battles, the sources told Reuters.
The Biden administration's study on LNG was released in December and found that unconstrained LNG exports could exacerbate climate change if the supplies replace lower carbon energy sources instead of coal in the places where it is shipped. The U.S. became the world's largest LNG exporter in 2023, as companies sought to help Europe break its dependence on Russian energy following the invasion of Ukraine.
The findings are supposed to help guide future decision-making around approving new projects and can be used by environmental groups to challenge new approvals.
Instead of ignoring the study, advisers are urging Trump to take it head-on, using a public comment period to discredit some of its key findings and argue that previous studies on LNG should take priority.
The comment period for the Biden study ends on Feb. 18. Trump's advisers are even considering the merits of extending the deadline to allow for more time to challenge the study and thwart any potential lawsuits when they approve the pending export permits.
Fred Hutchison, president and CEO of LNG Allies, an industry advocacy group, added that any such recommendations to Trump would "largely track what the companies that have been caught up in the Biden administration's pause on LNG prefer."
"The industry wants to see a balance struck between durability of approvals in the courts and speed of those approvals," he said.
The Trump transition team did not comment on whether they are considering a more deliberate approach to the LNG issue.
"Voters re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail, including lowering energy costs for consumers," said Trump transition spokeswoman Karoline Leavitt.