Published: December 30, 2024 |

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Venture Global LNG began shipping initial cargoes from its new liquefied natural gas export plant in Louisiana last week, marking the startup of operations in what will eventually become the biggest LNG export facility in the United States if all goes according to plan. Bloomberg reports that the first cargo shipped from the Plaquemines facility on Dec. 26 is bound for the German utility company EnBW and will arrive in early January.

BIDEN’S LNG PAUSE LIKELY TO BE LIFTED

The opening of this newest LNG export terminal came just 10 days following the release of a study by the Department of Energy which claims that continued expansion of the booming industry will result in higher greenhouse gas emissions. That study’s release was accompanied by a letter from Energy Secretary Jennifer Granholm claiming that “unfettered exports” of LNG would create domestic shortages of natural gas and result higher prices for U.S. consumers.

That DOE study was met with mixed reviews and is unlikely to hold much sway in the coming second term of President-elect Donald Trump. Trump has pledged to end the “pause” in permitting of new LNG export facilities invoked by President Joe Biden as one of his first acts upon assuming office and has promised to seek ways to speed up permitting for energy-related projects of all types, including proposed new LNG terminals.

When she spoke at the CERAWeek conference in Houston last March, Secretary Granholm told a skeptical audience that the permitting pause would most likely be well “in the rearview mirror” by the time the meeting convenes in March 2025. She and the current President have apparently decided not to make that prediction a reality, but there is little doubt the President-elect will do it for them.

S&P GLOBAL STUDY PROVIDES FUEL FOR TRUMP’S LNG POSITION

A new study by S&P Global seems likely to provide fuel to Mr. Trump’s desire to facilitate further growth in the domestic LNG industry. That study, released the day after the DOE report, details an array of positive economic benefits that could accrue from continued expansion.

Among those findings detailed by S&P Global Vice Chairman Daniel Yergin are:
• U.S. LNG industry growth is expected to double its U.S. economic footprint to 2040.
• $1.3 trillion in GDP contribution supporting an average of 495,000 direct, indirect and induced U.S. jobs.
• $2.5 trillion in revenues for U.S. businesses, over $900 billion in expenditures, $165 billion in tax revenue, and
  $250 income per year per household.
• Annual U.S. LNG exports equal energy needs to heat more than 80 percent European Union households for a
  year.
• LNG exports and feedgas double and drive incremental crude and NGLs volume, supporting domestic
  manufacturing amongst other demand.

The S&P Global study also disputes Granholm’s fears that continued export growth would result in higher domestic gas prices, finding that the lifting of the Biden-era restrictions to growth and letting markets work would result in less than a 1 percent rise in consumer prices. At a fundamental level, S&P Global says that the regulatory and legal uncertainty created by Biden’s pause and other negative policy actions is putting a great deal of growth at risk, including over $250 billion in potential GDP and more than 100,000 future jobs.

“Furthermore, if U.S. export growth potential were not to materialize, 85% of the resulting gap would be filled by fossil fuels from outside the U.S.,” said S&P Global Vice Chairman Daniel Yergin.

LNG EXPORT ARE NOW A VITAL GEOPOLITICAL ASSET

Yergin points out the fact that “U.S. LNG supplies responded when Europe faced an energy crisis during the Ukraine-Russia war.” Somewhat ironically, this response to the Russian invasion of Ukraine and resulting cutting-off of Russian gas supplies into Europe was not only supported but encouraged by Biden at the time. Just a few weeks into that lingering war, Biden made a special trip to Ukraine where he made major commitments on behalf of the U.S. LNG industry to supply European gas needs without having consulted with its leading companies in advance.

Yergin notes that “U.S. LNG adds a new dimension to the influence and geopolitical position of the U.S. in the world,” largely as a result of its ability to quickly step in and fill this pressing need. But the evolution of the Biden administration’s posturing towards this vital U.S. industry from positive to negative over the last two years has been striking and difficult to explain and justify.

Regardless of that evolution by the current presidency, Yergin points out that, “LNG has become fundamental to the global energy transition, complementing rapid growth in renewables, displacing oil and coal consumption and promoting decarbonization in developing countries.”

By: David Blackmon, Forbes

David Blackmon is an energy-related public policy analyst/consultant based in Mansfield, TX. David enjoyed a 40-year career in the oil and gas industry, the last 23 years of which were spent in the public policy arena, managing regulatory and legislative issues for various companies. During this time, David led numerous industry-wide efforts to address a variety of issues at the local, state and federal level, and from April 2010 through June 2012, he served as the Texas State Lead for America’s Natural Gas Alliance. David also maintains a growing media communications practice, and is a frequent guest on television, radio and podcasts.