In a win for the energy industry, U.S. District Judge James D. Cain Jr. in Louisiana has issued a preliminary injunction on President Biden’s halt of new licenses for exports of liquefied natural gas (LNG) in the U.S.
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Details of the Lawsuit
The judge gave his decision in a lawsuit filed by 16 states, claiming that Biden broke federal law by halting licenses in January to assess climate impact. While giving the decision, the judge stated his belief that the U.S. government’s decision to halt approvals seemed “completely without reason or logic,” and allowed states to challenge the moratorium.
West Virginia Attorney General Patrick Morrisey praised the decision as beneficial for the energy industry and “the millions of jobs it supports.” On the other hand, the U.S. Department of Energy disagreed with the ruling and is currently reviewing the court’s order.
Why Did Biden Halt New Licenses?
Climate activists have long argued that LNG exports fuel global warming, as they sustain global reliance on fossil fuels. As a result, under Biden’s direction, the Department of Energy (DoE) hit the pause this year on new export licenses of LNG to Asian nations and other countries that are not free trade partners with the U.S. The DoE stated that it had halted the issuance of new export licenses while the agency scrutinized how the export of LNG shipments affected climate change, the economy, and national security.
Interestingly, the U.S. is the world’s largest exporter of LNG, and could grow further under its existing export licenses.
Is EINC a Buy?
For investors interested in investing in LNG stocks, the VanEck Energy Income ETF (NYSEARCA:EINC) offers a good option. Analysts remain cautiously optimistic about EINC, with a Moderate Buy consensus rating based on 25 Buys and six Holds. Notably, Cheniere Energy (NYSE:LNG) is one of the top five holdings in this ETF, with a weightage of 6.5%.
Over the past year, EINC has increased by more than 20%, and the average EINC price target of $85.52 implies an upside potential of 7.6% from current levels
