Submitted via email
President Joseph R. Biden, Jr.
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500
The Honorable Jennifer M. Granholm
Secretary, U.S. Department of Energy
100 Independence Avenue, SW
Washington, D.C. 20585
Re: Objections to the Liquefied Natural Gas Export Pause
Dear President Biden and Secretary Granholm:
We, the Attorneys General for Kansas, Indiana, Louisiana, West Virginia, Alabama, Alaska, Arkansas, Georgia, Idaho, Kentucky, Mississippi, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, and Wyoming urge
you to end the “pause” on exports of liquefied natural gas (LNG). Instead of addressing America’s real energy challenges, your administration has decided to double down on a reckless environmental agenda through this TikTok-inspired “pause.” But this surprise freeze is
(1) unlawful, (2) harmful to our economy, and (3) detrimental to our national security. It emboldens and empowers Iran and Russia, while further hampering our ability to protect ourselves.
The Liquefied Natural Gas Export “Pause” is Unlawful Your administration’s planned “pause”—which we might more accurately call a series of constructive denials—of most American LNG exports is unlawful for several reasons. First, the Department of Energy has identified no authority to issue blanket denials of export permits. As you should know, the Department “literally has no power to act—including
under its regulations—unless and until Congress authorizes it to do so by statute.”1 Yet neither the White House nor the Department cited any statutory authority when announcing the pause. Instead, the White House merely referred to President Biden’s executive order commanding federal agencies to reorder federal operations around single-minded and fears about climate change. But that order is not sufficient, as “a President may only confer by Executive Order rights that Congress has authorized the President to confer.”2
If you intended to rely on Section 3 of the Natural Gas Act (NGA), then you were mistaken. That statute requires the Department to approve applications to export LNG to nonFree Trade Agreement countries “unless, after opportunity for hearing, it finds that the proposed exportation … will not be consistent with the public interest.”3
It creates a “general presumption favoring [export] authorization.”4 The Department would need to make “an affirmative showing of inconsistency with the public interest” to deny the application.5
Here, you have signaled every intention to deny a sweeping category of exports based on allusions to environmental harms.6
Your administration and its allies appear to be “seizing on regulatory loopholes and prejudging the outcomes of complicated policy analysis.”7 Agency
predetermination is bad enough,8 but it’s doubly wrong when it conflicts with Congress’s express purpose in enacting the statute. Indeed, some suggest this pause is an effort to obstruct ongoing
litigation concerning related export approvals.9
The Department’s defiance of statutory requirements is even more remarkable because LNG exports are of vast “economic and political significance.”10 As discussed below, our allies rely on LNG exports for their energy needs.11 And meeting this demand requires new export terminals leading to billions of dollars in capital expenditures and tens of thousands of new jobs.12 The Department’s pause jeopardizes all this work13—all without the Department pointing to any “clear congressional authorization” to issue this pause in the first place.14 Congress is aware of the economic and environmental impacts that LNG exports may have, but it has declined to act.
In short, you are reconstructing the NGA’s regulatory structures. “[W]hen Congress wishes to alter the fundamental details of a regulatory scheme, as [the Department] contend[s] it did here through delegation, [courts] would expect it to speak with the requisite clarity to place that intent beyond dispute.”15
Second, we anticipate that your action will give rise to liability under the Administrative Procedure Act for unreasonable delay. “To state a claim for unreasonable delay,” a plaintiff need only “allege that the agency failed to take a discrete agency action that it is required to take,” and
show “that the delay was unreasonable.”16 Courts consider several factors in evaluating reasonableness, including whether the delay “may be undermining the statutory scheme, either by frustrating the statutory goal or by creating a situation in which the agency is losing its ability to effectively regulate at all.”17
The elements of a delay claim are here. The NGA requires the Department to address these export applications. As for unreasonableness, several things confirm that the “pause” will fail that standard. Among other things, this delay will only further lengthen what is already a
“lengthy, cumbersome process” in an industry where competition is fierce and time is of the
essence.18 Further environmental review will unreasonably duplicate the “extensive
environmental regulatory process” that applicants must already undergo.19 And this situation is
not one where the Department has limited resources and competing obligations that compel
delay;20 the Department is creating this problem all on its own considering how the process could
take up to 15 months or more to finish.21
Third, beyond delay, your action also fails to stay “within the bounds of reasoned decision-making.”22 The reasons why should be clear to this point—chiefly, the Department has failed to consider the effects of this indefinite pause. Several export projects are awaiting
approval from the Department, and the Department doesn’t explain how the pause will impact those projects. Here again, it’s likely because the Department has no idea what will happen to those projects. For example, an official said that the pause will have no impact on the Venture
Global’s Calcasieu Pass 2 project—a facility planned to be built along the Louisiana coast—but a Department spokesperson later clarified that all “current and future pending applications” will be affected by the pause.23 As companies make final decisions on whether to invest in these projects, the Department has no answers. And we as discuss below, the Department does not explain how the pause will impact our national security interests as our allies have come to depend on our LNG exports.24 So the Department has not adequately explained how it arrived at its decision; the pause is neither “reasonable” nor “reasonably explained.”25
Fourth, and finally, the Department did not offer a chance for anyone to weigh in on the pause. Generally, agency legislative rules must go through the APA’s notice-and-comments procedures.26 And the pause here is a substantive rule required to go through that process. The pause effectively commands the Department to stop performing its obligations under the NGA to approve export applications and does not leave the agency free to exercise discretion unless it chooses to disobey the policy. That’s the exact type of substantive rule that needs to go through notice and comment because it modifies substantial rights.27
Original source can be found here.