Biden's misguided LNG pause follows Carter's path to a one-term presidency



LNG exports 06122014

President Biden’s recent pause on new permits for liquified natural gas (LNG) exports is foolish policy. Unfortunately, these types of misguided export restrictions are not unprecedented. At this exact point in his presidency, Jimmy Carter similarly implemented a half-measure ban on grain exports to the Soviet Union. 

Carter’s grain embargo should be an ominous warning for President Biden: Not only did it fail to achieve its objective of forcing a Soviet withdrawal from Afghanistan, but it also antagonized American agricultural communities and drove an aggressive swing toward Ronald Reagan in the 1980 election.

The idea behind Carter’s misguided embargo was born from America’s agricultural boom in the wake of the Second World War, during which time corn production tripled and wheat production almost doubled. Meanwhile, the Soviet Union was blighted by socialist inefficiencies that left its agriculture acutely susceptible to bad weather. 

Following the Red Army’s invasion of Afghanistan, Carter announced in a televised address in January 1980 that some American grain exports to the Soviet Union would be curtailed. The goal was to deprive Soviet livestock of American feed, thereby driving up consumer costs and fomenting public pressure on the Kremlin to withdraw from its southern neighbor.

On paper, the scheme looked convincing. In practice, it was a disaster. Carter vowed that American farmers would not bear the brunt of the cuts and that other major grain-exporting nations would not swoop in to fill the American void. Both assertions proved hollow. Farmers in the Midwest, who had already endured dramatic price volatility throughout the 1970s, weathered another round of rollercoaster grain prices.

The embargo was also poorly received on the international stage. Carter had only limited some American grain exports, thereby diluting the pitch for other countries to ignore the Kremlin’s requests to feed its livestock. Argentina, Australia and countries in Western Europe all increased their grain exports to the Evil Empire, undercutting Carter’s strategy.

Even once domestic grain prices had settled, the continued restrictions fueled criticism in the Midwest that Carter was pointlessly denying American farmers a lucrative international market. Unsurprisingly, both Iowa and South Dakota, states that Carter had lost in 1976 by a whisker, swung dramatically in favor of Ronald Reagan, who quickly repealed the embargo in April 1981.

Fast forward 44 years, President Biden’s pause on LNG export permits is set to replicate Carter’s folly. According to the Biden administration, the pause on approving additional LNG permits is driven by the risks of exacerbating climate change. Like Carter’s embargo, this permit pause will not achieve its objective. 

Punitive measures to restrict the clean production of American oil and gas typically incentivize a shift toward less efficient alternatives. For example, late last year, the German government approved the reactivation of coal-fired power plants due to high natural gas prices. Further curtailing global supply risks doubling down on emissions-intensive sources of energy.

Meanwhile, the permitting pause will do little to rein in China’s prolific emissions. In 2022, just 2.5 percent of American LNG was shipped to the People’s Republic. In that year, China’s economy was 30 percent smaller than that of the U.S., yet its overall greenhouse gas emissions were 260 percent larger. The Biden administration has been quick to bask in shallow congratulations for this latest action from environmental activists, but the praise is divorced from basic arithmetic.

Just as President Carter failed to rally the international community to sacrifice their own prosperity, so too will President Biden. This time, however, rather than American allies, it will be countries like Russia and Iran that gleefully seek to fill any global demand for gas that they can seize.

Farmers in the Midwest didn’t appreciate Carter’s toying with their livelihoods, and today, neither will the men and women who earn a living in the American natural gas industry. Increased natural gas use has been the primary driver of declining American carbon dioxide emissions while also preventing thousands of cold-related deaths each year. An assault on the industry that has demonstrably reduced emissions and saved lives will earn the president little applause in the nation’s gas-producing regions.

Due to crushing inflation, foreign policy bungles and a tragic hostage situation, President Biden’s tenure has been marred by comparisons with one-term president Jimmy Carter. History may repeat itself if this misguided LNG policy remains in place. 

Oliver McPherson-Smith, Ph.D., is the director of the Center for Energy & Environment at the America First Policy Institute and a research fellow at Stanford University’s Hoover Institution.

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