The Biden administration’s biggest climate policy miscalculation—unchecked LNG export growth—has an unusual cheerleader in the U.S. Ambassador to Japan.
The pressure on the Biden administration to stop the rapid ongoing expansion of liquified natural gas (LNG) export infrastructure in the United States is intensifying. Over 300 organizations released a letter at COP28 demanding that the administration halt the planned build-out of LNG facilities. 60 Democrats in Congress wrote a letter demanding that the Energy Department reassess whether new LNG terminals were in the national interest. The Hill reported that the Biden administration’s continued support for LNG exports was causing a “revolt” within the Democratic party.
As recent research has demonstrated, LNG emissions exceed those of coal. Gas leaks throughout its whole supply chain, and also requires energy-intensive liquefaction, pressurization, refrigeration, and international ocean shipping on polluting tankers to be exported. If all planned LNG facilities in the U.S. were built, the emissions from U.S.-produced LNG would exceed the emissions from the entirety of the European Union.
How can we account for the administration’s bewildering failure to see sense on this? President Biden has strong climate people in his cabinet; he has at least aimed to be a climate president. But under his watch, the U.S. is rapidly building out brand new, immensely polluting fossil fuel infrastructure.
One approach is to look at the administration’s LNG support through the lens of “personnel as policy.” From this angle, it’s evident that the administration personnel most responsible for this devastating oversight are not Biden’s climate appointees at all, but his foreign policy people. These are folks who care only about the geopolitics of energy—about energy as a “strategic asset”—not about the ecological ramifications of energy production. In the game they’re playing, some people have to lose for others to win, and they’re utterly determined to be the winners.
Amos Hochstein is one such figure: a former LNG executive himself, he rose through the ranks of the State Department to become Biden’s top energy security (now “energy and investment”) advisor in the White House. (Our Max Moran wrote about him in 2021). But the person we’ll be focusing on here is Ambassador Rahm Emanuel, who has reshaped the typically cushy position of U.S. Ambassador to Japan into a sort of bludgeon with which to batter China (see the White House asking him to please stop taunting Xi Jinping on Twitter), while pushing Japan towards the kind of energy policies that fit his vision of U.S. energy hegemony.
A year ago, Rahm Emanuel published an op-ed in the Wall Street Journal on “How Japan Can Avoid Europe’s Energy Mistakes.” His proposal was that “[c]ountries should import natural gas from their friends, not their enemies.” He argued that the U.S. was “ready” to supply Japan with more LNG; that “America’s security commitment to Japan is more than just weapons.” Rahm Emanuel’s worldview is far too narrow to encompass the devastation that climate change will wreak upon Japan—an island nation extremely vulnerable to sea level rise—if the world does not get off oil and gas. It’s up to Japan not to wear those same blinders.
Over the past year and a half, Rahm Emanuel has become the Biden administration’s loudest cheerleader for LNG exports. This newsletter will sketch a (partial) history of Emanuel’s longtime disregard for the imperative of climate policy, and his burgeoning interest in energy policy insofar as it can be weaponized for geopolitical leverage.
Emanuel as Ambassador to Japan
As Lee Harris reported for the Prospect, “LNG boosters have enlisted Rahm Emanuel, U.S. ambassador to Japan and former chief of staff to President Obama, to champion export capacity. The support of officials in the administration is crucial for gas lobbyists to show sustained demand for LNG.” And the impact of Emanuel’s vocal support for LNG exports is evident.
Earlier this month, Japanese companies JERA and Inpex started pushing U.S. regulators to quickly permit CP2. CP2 is Venture Global’s proposed LNG export facility in Louisiana that is quickly emerging as a flashpoint fossil fuel project comparable to the Willow Project. But the stakes with CP2 are even larger than Willow. Not only because the emissions from the gas that would pass through this export facility, as we’ve written about before for this newsletter, would be twenty times that of Willow, but because Biden is fast eroding his voter base on the left. The White House should not—cannot afford to—drive this nail in. But that would require slowing Rahm Emanuel’s roll.
JERA is one of the world’s biggest LNG buyers, and Inpex is Japan’s largest oil and gas exploration and production company. Inpex argued that CP2 was “important for Japan’s energy security.” That’s music to Rahm Emanuel’s ears, who has been banging on that same drum. As Nikkei reported, Emanuel warned that “energy reliability and energy security” will be the key factors underlying future business decisions, “implying that the U.S., the world’s top producer of oil and gas, has a strong advantage over China,” and arguing that America’s fossil energy abundance was a reason for Japan to deepen its partnership with the U.S.
When Rahm Emanuel convened the Alaska LNG Summit last year in Tokyo to sell Japanese officials and companies on the pipe dream of the Alaska LNG project, both JERA and Inpex attended. Alaska LNG is a would-be $44 billion project to build an 807 mile gas pipeline across melting Alaskan permafrost from a North Slope gas treatment plant to a liquefaction plant and export terminal at Cook Inlet. The climate and ecosystem damage from this project would be massive, and the price tag is enormous. But the federal government has made many capitulations to the fossil fuel industry that make this project more financially viable: the Inflation Reduction Act’s loan guarantees and subsidies for enhanced oil recovery (pumping captured carbon into the ground to extract more oil), as well as the Trump Energy Department’s expansion of LNG export authorizations from 20 years to 30 years. Rahm Emanuel is working in tandem with fossil fuel-friendly Alaskan Senators Sullivan and Murkowski, Amos Hochstein, and others to convince Japanese companies that the U.S. government backs this project—and LNG exports in general—wholeheartedly.
JERA and Inpex aren’t the only LNG companies eating that rhetoric up. Energy Transfer (recently charged with environmental crimes in Pennsylvania and owner of the illegally operating Dakota Access Pipeline) is seeking Energy Department approval to start exporting LNG from its Lake Charles facility in Texas. The company cited Rahm Emanuel claiming that “the United States is ‘all in’ with Japan as we coinvest in each other’s country and help each other strengthen our energy supply lines” in support of its petition for gas export approval. Kyushu Electric, a Japanese utility, has urged U.S. regulators to rapidly approve the Lake Charles facility.
“‘Energy security’ is the new term, one of the new terms, for economic statecraft of the next 30 years,” Emanuel said. But for Emanuel, “energy security” means energy independence for the United States, and energy dependence on the United States for everyone else. Japan has no oil and gas reserves, but it does have tremendous renewable energy potential: for pumped hydro energy storage, for offshore wind and rooftop solar, for geothermal energy. But decarbonizing Japan would benefit Japan more than the U.S. (if you ignore the fact that mitigating climate change helps everyone), so Emanuel is against it.
In Emanuel’s myopic worldview, “three C’s” changed the world over the last three years: “COVID, Conflict, and Coercion.” As Lee Harris pointed out, “climate change” did not make the cut.
Emanuel As Obama’s Chief of Staff
In this regard, Rahm Emanuel has changed little since he was President Obama’s chief of staff in 2009 and 2010. Emanuel didn’t think that climate change was a politically winning issue, and so he actively deprioritized it.
As chief of staff, Emanuel routinely prevented the proposals of Obama’s climate personnel from reaching the president. “What he cared about was winning — acquiring and maintaining presidential power over an eight-year arc,” Eric Pooley recalled for Grist in 2010. “Climate and energy were agenda items to him, pieces on a legislative chessboard; he was only willing to play them in ways that enhanced Obama’s larger objectives.” Pooley summed it up bluntly: “The chief of staff was an obstacle to climate action.”
Ryan Lizza described these same dynamics in a long-form piece for the New Yorker in 2010: “Emanuel prized victory above all, and he made it clear that, if there weren’t sixty votes to pass the bill in the Senate, the White House would not expend much effort on the matter.” Emanuel was the one who pushed for a “modest bill” to take the place of a more ambitious cap-and-trade climate bill.
When Emanuel did talk about energy policy back then, it was always about U.S. “energy independence.” In 2008: “I’ll bet you wince when you have to fill up the family car at the gas station — especially knowing that a lot of that money is going straight to countries that don’t like us very much. That’s why we Democrats are fighting for real energy independence.” In 2009: “The goals are having an energy policy in which America is independent of its dependent – of its tie to foreign oil and having a policy in which America basically has an energy policy that frees itself from exporting $700 billion of wealth to the Mideast. Those are the objectives.”
Obama’s greatest climate mistake was welcoming the shale gas boom of the early 2010s as ushering in a new era of American energy abundance—nevermind the potent greenhouse gas emissions. Rahm Emanuel was bullish on gas as well. In 2013 on the Charlie Rose Show, he crowed that “for the first time since Jimmy Carter,” the U.S. was set to “export more energy than import”: a “50-year historic event that’s going to change global politics, America’s economic future.” He called it “the first day of American independence.”
In 2014, Emanuel effused that the U.S. gas production boom was “as big as the internet” in terms of its potential to reshape the world. In 2016, the American Petroleum Institute quoted Emanuel’s “cheap energy” rhapsodizing in their marketing materials.
Emanuel As Mayor of Chicago
When Rahm Emanuel leveraged his Chief of Staff appointment to become mayor of Chicago in 2011, his priorities were consistent. He quickly shut down Chicago’s environmental oversight department. Over two terms he cut the city’s environmental inspection staff in half, and annual inspections dropped by more than half. Enforcement actions against polluting corporations dropped precipitously, hazardous material inspections plummeted by more than 90 percent, and air quality inspections dropped by 70 percent. Overall, his environmental track record was one of negligence, all the while talking up his green credentials. We could expend a lot of ink on Rahm Emanuel’s dismal track record as mayor, but in the interest of concision, here’s GQ’s summation:
“Rahm Emanuel, who made his name in the Clinton and Obama administrations exclusively for being a dickish pit viper to people, just wrapped up his eight-year tenure as mayor of Chicago, leaving office with a list of accomplishments that includes, according to The Intercept and the Washington Post and other sources: shuttering half the city’s mental health clinics, eliminating its Department of Environment, closing nearly FIFTY public schools, appointing a “CEO” of the remaining public schools who ended up getting convicted of fraud, cravenly attempting to prevent video evidence of Laquan McDonald’s murder from becoming public, jacking up water and sewage fees, instigating a teacher’s strike, and allocating property tax revenue meant for disadvantaged neighborhoods to help subsidize a luxury development instead.”
What Emanuel excelled at as mayor was building a massive political money machine for himself, characterized by what the Chicago Tribune identified as “a pattern of mutually beneficial interactions between the mayor and his major supporters.” As mayor, Emanuel’s top energy company donor was Exelon, a major public electric utility headquartered in Chicago, which gave him at least $134,200. Emanuel actually helped broker the deal that created Exelon when he was working at investment bank Wasserstein Perella in the early 2000s. Centerview Partners, the investment banking firm that Rahm Emanuel would go to work for in 2019 after two terms as mayor, was also a donor to Emanuel’s mayoral campaigns, and when Emanuel was working at Centerview in 2021, Exelon was one of their clients.
Both Emanuel and Obama had strong Exelon ties in the early 2010s. Early on in Obama’s presidency, an Exelon lobbyist called Exelon “the president’s utility.” Investigative reporting from The New York Times in 2012 revealed that Exelon executives secured “an unusually large number of meetings with top administration officials at key moments in the consideration of environmental regulations.”
Exelon, which operates several nuclear plants, successfully lobbied the Obama administration to weaken clean water regulations that would have cost Exelon money. “Days after a March 2011 meeting with Exelon executives, a White House official instructed the E.P.A. official in charge of drafting the water intake rule to rewrite major portions, according to White House e-mail records,” The New York Times reported. “The rewrite effectively narrowed the circumstances under which nuclear plants would be required to spend hundreds of millions of dollars to eliminate the hazard for aquatic life.”
One More Spin Of The Revolving Door
As Julia Rock and Andrew Perez detailed for Jacobin back in 2021, Rahm Emanuel left his role as Chicago’s mayor in disgrace, but was embraced by Wall Street, which quickly rehabilitated him to the Washington elite. Between 2019 and 2021, he made over $12 million from his work at investment banking firm Centerview Partners.
While Emanuel was at Centerview, the firm was involved in billions worth of mergers and other transactions for fossil fuel companies, including Aggreko plc, Apergy Corporation, Blackhawk Mining, Bloom Energy, Engie SA, Emerson Electric, Era Group, Evergy, Exelon, PG&E Corporation, Riverstone Holdings, Summit Utilities, Ultra Petroleum and others. Our Hydrogen Industry Agenda Report (p. 29) details Rahm Emanuel’s support for hydrogen greenwashing in the U.S. and Japan, including Centerview’s work for Bloom Energy, a major hydrogen industry player.
“While Emanuel was attacking the Green New Deal, Centerview was landing lucrative deals with fossil fuel companies,” Rock and Perez wrote. He was also giving speeches to fossil fuel companies. Emanuel brought in more than $300,000 for speeches to corporations and industry influence groups including Duke Energy and the American Fuel and Petrochemical Manufacturers. In those speeches, he shared the stage with Republican co-speakers like Trump’s former chief of staff General Kenny, and George W. Bush’s former Deputy Chief of Staff Karl Rove. His financial disclosure report indicated that he donated the speeches’ honoraria.
Rahm Emanuel is a prototypical revolver, advancing corporate-friendly policies in government and cashing out handsomely upon his return to the private sector. As the Chicago Sun Times noted, his quick, multi-million-dollar stint at Centerview was “the second time he’s been able to accumulate millions of dollars in a few years before returning to a government post,” with the first being the cool $16 million he made at investment banking firm Wasserstein Perella between leaving the Clinton White House in 1999 and running for Congress in 2002.
Where will he go at the end of his stint as LNG Ambassador Extraordinary and Plenipotentiary to Japan? My odds are on another investment banking firm, but there’s always the lucrative geopolitical consulting route pioneered by Kissinger.