ARKANSAS, February 9 (Future Headlines)- The Energy Department’s forthcoming review of U.S. liquefied natural gas (LNG) exports, prompted by a temporary halt on new permits, will delve into the profound impact of gas exports on the burgeoning green hydrogen market, as revealed by an administration official speaking to Reuters on Wednesday.

This review, mandated by the Department of Energy (DOE), aims to assess both the economic and environmental ramifications of proposed LNG export projects destined for Europe and Asia, regions with a robust appetite for natural gas. While the Biden administration foresees the review requiring “months of work, not years,” it signifies a pivotal shift in energy policy, aligning with President Biden’s pledge to suspend approvals for new LNG export applications.

The decision to pause LNG export approvals, driven by mounting pressure from environmental advocates and local communities in gas-producing regions, has elicited strong pushback from the U.S. oil and gas sector. Critics within the industry argue that such a moratorium jeopardizes the energy security of U.S. allies in the European Union, where demand for natural gas remains robust.

Contrary to industry concerns, the administration official reassured that the U.S. is equipped to meet current European gas demand without issue. Furthermore, the official pointed to Europe’s evolving energy landscape, noting a marked shift away from gas reliance. European Union officials echoed this sentiment, asserting that Europe boasts sufficient gas supply for the next decade.

The impetus for a comprehensive review stems from the recognition that the LNG market has undergone significant transformation since the last comprehensive analysis nearly a decade ago. Previously, LNG importers leaned heavily on coal, utilizing gas to displace the higher-emission fossil fuel. However, with the decline of coal consumption in Europe and other regions, the landscape has evolved, necessitating a reassessment of the potential impact of increased U.S. LNG exports.

In particular, the review will scrutinize whether expanded U.S. LNG exports could impede the adoption of green hydrogen, a cleaner alternative poised to play a pivotal role in decarbonizing energy systems. As global efforts to combat climate change intensify, the imperative to prioritize low-emission alternatives like green hydrogen has gained traction, underscoring the need for a nuanced analysis of LNG export policies.

Reporting by Kevin Wood; Editing by Sarah White