Biden Administration Suspends Rule to Ship LNG by Rail

Last week, the Biden administration’s Department of Transportation (DOT) suspended a 2020 rule that authorized the transportation of liquified natural gas (LNG) by rail. The Pipeline and Hazardous Materials Safety Administration (PHMSA), along with the DOT, dealt a blow to the rail industry, especially companies who had proposed to move shale gas by using a conduit of rail tank cars and trucks.

While the suspension of the rule only pauses these shipments until 2025, the DOT has through then to codify the ban on transporting LNG by rail that was in place before former President Trump took office. The move illustrates a larger issue characterizing the U.S. energy industry. Since Russia’s invasion of Ukraine in early 2022, the global energy markets have been marked by volatility and uncertainty. As European countries decoupled from their dependence on Russian energy, the U.S. has filled the void by exporting our natural gas across the pond. However, demand is not the issue—transporting our domestic supply from abundant shale fields, such as the Marcellus Shale, is the major problem.

Pipeline constraints have limited the U.S.’ ability to maximize the amount of energy the nation exports abroad. The suspension of LNG by rail rule offers the administration an opportunity to address our transportation limitations in a much safer and more efficient manner by investing capital into infrastructure projects such as pipelines. With the possibility of a new LNG terminal in southeast Pennsylvania, for example, the Biden administration should compliment our energy production with more infrastructure to move it safely.

Suspending the 2020 LNG rule will be shortsighted if the U.S. does not simultaneously build out more pipeline infrastructure. If the Biden administration is serious about supplying our allies abroad with cheap energy from allied nations, as well as keeping domestic energy prices low, then pipeline constraints must be addressed.